TODAY’S S&P 500 SET-UP - June 22, 2011
After 11 consecutive trading days of ZERO Sectors of 9 being bullish on the Hedgeye immediate-term TRADE duration, 2 of 9 Sectors flashed green yesterday - Healthcare (XLV) and Utilities (XLU). That's the good news.
The bad news is that is a very defensive rotational signal - and the SP500 overall did not confirm bullish TRADE (1305 is TRADE line resistance). So we shorted the SPY at 1297 today, looking for a continuation of this market's bearish intermediate term TREND (1320 is TREND line resistance). Fortuitously, we covered our Basic Materials (XLB) short last week when we signaled a "Short Covering Opportunity." We also remain long Healthcare (XLV), which is now up +12.2% for the YTD.
As we look at today’s set up for the S&P 500, the range is 46 points or -2.82% downside to 1259 and 0.73% upside to 1305.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +2167 (+1098)
- VOLUME: NYSE 851.16 (+8.23%)
- VIX: 18.86 -5.65% YTD PERFORMANCE: +6.25%
- SPX PUT/CALL RATIO: 1.57 from 1.65 (-4.80%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 22.52
- 3-MONTH T-BILL YIELD: 0.03%
- 10-Year: 2.99 from 2.97
- YIELD CURVE: 2.59 from 2.59
MACRO DATA POINTS:
- 7 a.m.: MBA Mortgage Applications, prior 13.0%
- 10 a.m.: FHFA House Price Index, est. (-0.3%), prior (-0.3%)
- 10:30 a.m.: DoE inventories
- 12:30 p.m.: FOMC rate decision
- 2:15 p.m.: Bernanke press conference
WHAT TO WATCH:
- Bullish sentiment increases to 37.6% from 37.0% in the latest US Investor's Intelligence poll
- Greek Prime Minister George Papandreou won a parliamentary confidence vote
- Americans are growing more dissatisfied with Obama’s handling of the economy, Bloomberg poll shows
- FOMC completes two-day meeting with interest-rate decision at 12:30 p.m
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Silver-Coin Sales Boom at Perth’s Mint as Mums and Dads Desert Paper Money
- Sugar Crop in Thailand Climbing to Record for Second Year May Curb Prices
- Century of Hunger Is Warning From France as Farm Ministers From G-20 Meet
- Nickel-Concentrate Imports by China Double to Record as Production Climbs
- Aluminum’s Premium Gains Being Fueled by LME Warehouse Rules, Harbor Says
- Oil Drops on U.S. Stockpiles, OPEC Output; Goldman Sees ‘Choppy’ Prices
- Copper Drops on Concern Europe’s Debt Crisis May Erode Demand for Metals
- White Sugar Rises on Speculation About Crop Losses in Top Producer Brazil
- Wheat Gains as 16% Slump Lures Buyers, Canada’s Acreage Drops on Weather
- Gold May Advance as European Sovereign-Debt Concern Stokes Investor Demand
- Oil May Rise Above $95 a Barrel After Clearing Band: Technical Analysis
- Rubber in Tokyo Declines to Four-Week Low as Supply From Thailand Expands
- Rainstorms in China Provinces Seen Raising Concerns of Reduced Rice Crop
- Europe Commodity Day Ahead: France Warns of Century of Hunger Before G-20
CURRENCIES
EUROPEAN MARKETS
- EUROPE: red across the board with Greece bucking the trend but trading below TREND lines
ASIAN MARKETS
- ASIA: green across the board, with China (which we are long) up +0.10%, Japan up 1.79% and India is sliding again down -14.53% YTD
MIDDLE EAST
Howard Penney
Managing Director
