TODAY’S S&P 500 SET-UP - June 15, 2011
What's interesting about yesterday’s low-volume rally to lower-highs is that neither the volume nor the volatility signals confirmed anything but the same. The Hedgeye S&P 500 Sector Risk Management Model continues to flash bullish on 0 of 9 Sectors. As we look at today’s set up for the S&P 500, the range is 49 points or -2.01% downside to 1261 and 1.80% upside to 1311.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +1919 (+2463)
- VOLUME: NYSE 915.34 (+0.78%)
- VIX: 18.26 -6.88% YTD PERFORMANCE: +2.87%
- SPX PUT/CALL RATIO: 1.50 from 1.67 (-6.13%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 19.95
- 3-MONTH T-BILL YIELD: 0.05%
- 10-Year: 3.11 from 3.00
- YIELD CURVE: 2.66 from 2.60
MACRO DATA POINTS:
- 7 a.m.: MBA Mortgage Applications, prior 0.4%
- 8:30 a.m.: CPI, est. 0.1%, prior 0.4%
- 8:30 a.m.: Empire Manufacturing, est. 12.00, prior 11.88
- 9 a.m.: Total Net TIC Flows, prior $116.0b
- 9:15 a.m.: Industrial production, est. 0.2%, prior 0.0%
- 9:15 a.m.: Capacity utilization, est. 77.0%, prior 76.9%
- 10 a.m.: NAHB Housing Market: est. 16, prior 16
- 10:30 a.m.: DoE inventories
WHAT TO WATCH:
- Euro-area finance chiefs emergency session fails to break deadlock on how to enroll investors in second Greek bailout
- Bullish sentiment decreases to 37.0% from 40.9% in the latest US Investor's Intelligence poll; Bearish sentiment increases to 26.0% from 22.6% - those expecting a market correction increases to 37.0% from 36.5%
- Federal Reserve deciding whether to set explicit inflation targets - Bloomberg
- Consumers ditching cable for satellite, phone companies - LA Times
- Conneticut AG asks Citi for data on its security after hacking attack - FT
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Oil Declines as Concerns Over European Debt Counter U.S. Inventory Drop
- Copper Falls in London Before Industrial Production Reports: LME Preview
- Gold to Extend Gains as Buyers Seek ‘Safety’ Against Inflation, Fund Says
- Wheat Harvest Forecast Increased by Australia as Rains Boost Crop Outlook
- Natural Gas Production at Record as Shale Puzzle Solved: Energy Markets
- Copper Users in China Plunder Stockpiles as Goldman Forecasts Record Rally
- Canadian National Beating Canadian Pacific With Investors: Freight Markets
- Gold May Slide as Strengthening Dollar Saps Alternative Investment Demand
- Cotton Shortage in China May Worsen on Lack of Land, Increasing Imports
- Cocoa Arrivals From Brazil’s Bahia Decline by 5.3%, Analyst Hartmann Says
- Rio’s Hu May Get Chance to Exit China With Australia Plan for Jail Treaty
- Rubber in Tokyo Climbs for First Day in Six as Oil Price, Yen Boost Appeal
- European Commodity Day Ahead: Copper May Rally as China Stockpiles Plummet
CURRENCIES
EUROPEAN MARKETS
- EUROPE: no follow through across European stocks; Greece crashing again, down another -1.5%; Spain down -0.7%; Italy -1% - tick tock
- Euro-area finance chiefs emergency session fails to break deadlock on how to enroll investors in second Greek bailout
ASIAN MARKETS
- ASIA: no follow through to Chinese short covering-China down -0.9% and were long it yet; HK down another -.7%; India down -.9% to -11.5% YTD
MIDDLE EAST
Howard Penney
Managing Director