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TODAY’S S&P 500 SET-UP - March 21, 2011


Looking at day three of what we called the "Short Covering Opportunity;" we are seeing rallies across the board to lower-highs.  As we look at today’s set up for the S&P 500, the range is 16 points or -0.25% downside to 1276 and 1.00% upside to 1292.

PERFORMANCE:


As of the close yesterday we have 0 of 9 sectors positive on TRADE and 4 of 9 sectors positive on TREND. 

  • One day: Dow +0.71%, S&P +0.43%, Nasdaq +0.29%, Russell +1.16%
  • Month-to-date: Dow (3.01%), S&P (3.62%), Nasdaq (4.98%), Russell (3.50%)
  • Quarter/Year-to-date: Dow +2.43%, S&P +1.72%, Nasdaq (0.35%), Russell +1.40%
  • Sector Performance: - Financials +1.12%, Industrials +0.19%, Consumer Staples +0.24%, Healthcare +0.00%, Materials +0.16%, Utilities (0.48%), Tech (0.16%), Consumer Discretionary (0.40%), and Energy (0.80%)

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1315 (-86)  
  • VOLUME: NYSE 1906.76 (+83.92%)
  • VIX:  24.44 -7.32% YTD PERFORMANCE: +37.69%
  • SPX PUT/CALL RATIO: 2.02 from 2.17 (-6.70%)

CREDIT/ECONOMIC MARKET LOOK:


Treasuries were weaker of Friday.

  • TED SPREAD: 24.71 +0.203 (0.828%)
  • 3-MONTH T-BILL YIELD: 0.07% -0.01%
  • 10-Year: 3.28 from 3.25
  • YIELD CURVE: 2.67 from 2.65

MACRO DATA POINTS:

  • 8:30 a.m.: Chicago Fed Nat Activity Index, prior (-0.16)
  • 10 a.m.: Existing home sales, est. change M/m (-4.7%), prior 2.7%
  • 11 a.m.: Export inspections (corn, soybeans, wheat)
  • 11:30 a.m.: U.S. to sell $32b 3-mo., $30b 6-mo. bills

WHAT TO WATCH:

  • Nuclear Regulatory Commission meets to discuss Japan, U.S.; IAEA board holds meeting to discuss Japan
  • Japanese atomic crisis fears ease as spent-fuel pools cool and workers continue to repair damaged reactors, reconnect power
  • Buffett says South Korea ‘hunting ground’ for acquisitions
  • Google says Chinese government is blocking its Gmail service
  • Deutsche Telekom spoke to 5 different parties before agreeing to $39b wirelss unit sale to AT&T, Deutsche CFO

COMMODITY/GROWTH EXPECTATION:

  • CRB: 351.15 +0.71% YTD: +5.51%  
  • Oil: 101.07 -0.35%; YTD: +11.12% (trading +2.12% in the AM)
  • COPPER: 433.90 -0.12%; YTD: -1.93% (trading +0.51% in the AM)  
  • GOLD: 1,417.21 +0.97%; YTD: +0.62% (trading +0.77% in the AM)  

COMMODITY HEADLINES FROM BLOOMBERG:

  • Wheat Seen Rebounding 11% as Global Stockpiles Decline the Most Since 2007
  • Commodities Gain for Fourth Day as Oil, Gold Buoyed by Middle East Turmoil
  • Copper Rises on Speculation Japan Rebuilding Will Stoke Demand; Tin Gains
  • Gold Advances as Allies Attack Libyan Targets, Driving Energy Costs Higher
  • Palladium, Platinum the Metals Most Reliant on Japan Demand: Chart of Day
  • Wheat Advances for a Third Day as Investors Boost Bets, Crude Oil Climbs
  • Cocoa May Rally 26% on Stochastic Chart, Country Says: Technical Analysis
  • Asian Stores, Restaurants Drop Food From Japan on Concern Over Radiation
  • Oil Rises as Allied Forces Strike Libya, Turmoil Escalates in Middle East
  • Libya Intervention Risks Prolonged Oilfield Shutdowns, Qaddafi Reprisals
  • Soybean Oil Imports by China Drop to Lowest in Eight Months on Price Curbs

CURRENCIES:

  • EURO: 1.4182 +1.23% (trading -0.11%% in the AM)
  • DOLLAR: 75.718 -0.42% (trading -0.12% in the AM) 

EUROPEAN MARKETS:


Generally, European markets are trading higher for the third day, with the Telecom sector higher on the AT&T deal.  Eastern Europe continues to outperform with Kazakhstan, Ukraine and Hungary leading the way.

No MACRO data point on the calendar today

  • United Kingdom: +1.13%
  • Germany: +1.87%
  • France: +1.74%
  • Spain: +1.70%
  • Greece +1.63%
  • Italy: +0.86%

ASIAN MARKTES:


Most Asian market traded higher, with the exception of India and Pakistan down -0.22% and 2.06%, respectively.  The markets benefited from Prime Minister Naoto Kan saying he sees the light at the end of the tunnel for Japan’s crisis.

  • Japan: Closed
  • Hang Seng: +1.73%
  • China: +0.08%
  • India: -0.22%
  • Taiwan: +0.87%
  • South Korea +1.13%
  • Australia +0.35%

Howard Penney

Managing Director

THE HEDGEYE DAILY OUTLOOK - setup