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TODAY’S S&P 500 SET-UP - July 20, 2011

Yesterday, volume and Volatility (2 of our 3 core risk management factors) didn't confirm the PRICE move today, but 2 or 3 more days of follow through on this PRICE strength should do it and could easily carry this market towards 1352 SPX. If today's Tech move (+2.3% XLK) was a head-fake (doubtful given AAPL at the close), it would need to be confirmed by a TREND line breakdown of SPX 1319.

As we look at today’s set up for the S&P 500, the range is 33 points or -0.58% downside to 1319 and 1.90% upside to 1352.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 720

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: +1749 (+3888)  
  • VOLUME: NYSE 870.65 (-0.41%)
  • VIX:  19.21 -8.31% YTD PERFORMANCE: +11.5%
  • SPX PUT/CALL RATIO: 1.63 from 1.99 (-18.19%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 23.68
  • 3-MONTH T-BILL YIELD: 0.03% +0.01%
  • 10-Year: 2.91 from 2.94
  • YIELD CURVE: 2.57 from 2.57

 

MACRO DATA POINTS:

  • 7 a.m.: MBA Mortgage Applications, prior (-5.1%)
  • 9 a.m.: Moody’s U.S. commercial property prices
  • 10 a.m. Existing home sales, est. 1.9% to 4.9m, prior (- 3.8%)
  • 10:30 a.m.: DoE inventories
  • 6:15 p.m.: Fed’s Sack to speak to money marketers in NY

WHAT TO WATCH:

  • President Obama will renew talks at the White House this week, praised bipartisan Senate proposal for a $3.7t debt- cutting plan that emerged yesterday; House Republicans passed their own version yesterday
  • Greek Prime Minister George Papandreou to meet with EU leaders in Brussels tomorrow as officials struggle to agree on measures to restore confidence in region’s creditworthiness
  • WSJ is cautious on Cheerios (GIS), Frosted Flakes (K), Grape-Nuts (RAH)

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

COMMODITY HEADLINES FROM BLOOMBERG:

  • Oil Climbs for Second Day on Shrinking Crude Stockpiles, Stronger Economy
  • Copper Declines for First Day in Four as Three-Month High Spurs Selling
  • Corn Gains for a Second Day as Hot Weather in U.S. Midwest May Hurt Yields
  • Gold May Decline on Optimism Solution Is Nearer for Sovereign-Finance Woes
  • Coffee Falls as Supplies May Be Adequate to Meet Demand; Sugar Advances
  • Gold Price at Record Fails to Deter Purchasing in India as Demand Advances
  • Milk Powder Slumps to Eight-Month Low After Fonterra’s Call Proves Correct
  • Japan Won't Rule Out Possibility Radioactive Fukushima Beef Was Exported
  • Zinc Trades Near the Highest Price Since April as Supplies May Be Limited
  • Rice Exports From India at $400 a Ton May Lower Global Prices, Group Says
  • Rubber Supply Tightness Lasting Until 2018 May Raise Costs for Tiremakers
  • Ethanol Rebounds on Tax Credit, Price Discount to Gasoline: Energy Markets
  • Russia Arctic Route to Rival Suez May Aid Sovcomflot IPO: Freight Markets

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • EUROPE: ominous bounce to lower-highs; Italy fading here and Greece about to go negative on day; Sold my Germany yesterday; shorting Italy with impunity
  • Germany Jun PPI +5.6% vs consensus +5.5% and prior +6.1%
  • BOE MPC Committee minutes say recent developments had reduced the likelihood that a tightening in policy would be warranted in the near term

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • ASIA: surprisingly mixed give the Apple of everyone's American eye - India down -0.8%; China down -0.1% w/ Korea/Japan/Aus all up over 1%

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director