A couple of thoughts as we head into the afternoon session.
After a choppy early morning stocks found a thus far low for the day just around 10:45 am and at the 1305 – 1308 support level on the S&P 500. That support level also coincides with the 38.3% retracement of the equity bounce in place since June 4th. Any break below this morning’s lows and I see 1300 followed by 1290 and below there we are quickly at risk of revisiting 1265. On the upside the obvious next resistance point is 1335, also known as the highs from May 29th and yesterday.
The best chart to look to as a leading indicator in recent days has been that of the 10 year Spain cash bond. If we look at a chart comparing EUR/USD to the 10 year Spain bond (I inverted the yield on the chart, so the higher the yield the lower the level) note that EUR/USD may be targeting the 1.235 area. Just a thought.
