Morning Thoughts July 9

  • New 1yr low for the euro on Friday (-86bp at 1.2285). Spanish 10yr back around 7%. IMF’s Lagarde said likely to revise global growth outlook lower. US NFP disappointed at 80k vs 100k consensus. However, bulls will point to the increased chances of QE3
  • Broad-based weakness with all 10 sectors lower and 23/24 L2 sectors lower (Real Estate +21bp). Tech -179bp, Indus -133bp, Mats -117bp, Energy -108bp, Telecoms -86bp, Fncls -74bp, HCare -72bp, Cons Disc -39bp, Utils -36bp, Cons Spls -14bp.
  • The Russell 2000 is showing us the nicest candle reversal pattern, with a doji on Thursday and a gap down and shooting star candle on Friday.

The dollar index looks poised to rally higher into the 85 area soon…this should coincide with lower equities

The VIX remains low…so investors are likely a little complacent currently

Bonds remain in rally mode and this morning touched 1.51% on 10 year treasuries

Silver with a bit of a longer lense looks heavy here.  I dont want to trade the metals here but any break below the support line would set up a short side trade…something to watch

Today we have another Eurocrat meeting where they are looking to implement what they agreed to two weeks ago.  The pony show goes on and I for one remain keeping my timeframes very short.  Any further weakness in equities however would get me to initiate a bucket 2 swing trade short via the SPY.













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