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TODAY’S S&P 500 SET-UP - July 22, 2011

Funny things happen to markets when they go bullish TRADE and TREND in our model. That's been the SP500's signal since recovering TREND line support of 1319 this week.  We have been waiting to re-short the SPY - and why we waited to re-short the Financials (XLF) yesterday.  As we look at today’s set up for the S&P 500, the range is 32 points or -1.85% downside to 1319 and 0.54% upside to 1351.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 722

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: +1855 (+1518)  
  • VOLUME: NYSE 969.18 (+21.72%)
  • VIX:  17.56 -8.01% YTD PERFORMANCE: -1.07%
  • SPX PUT/CALL RATIO: 1.16 from 1.98 (-41.13%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 21.75
  • 3-MONTH T-BILL YIELD: 0.05% +0.03%
  • 10-Year: 3.03 from 2.96  
  • YIELD CURVE: 2.63 from 2.56

MACRO DATA POINTS:

  • 10 a.m.: State unemployment data released
  • 1 p.m.: Baker Hughes rig count

WHAT TO WATCH:

  • President Obama and House Speaker Boehner press for a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code
  • NFL owners approve 10-yr labor pact, await player vote
  • Borders Group can start liquidating stores starting today

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

COMMODITY HEADLINES FROM BLOOMBERG:

  • Gold Falls a Second Day in London as Europe Debt Concern Eases
  • Copper May Rise on Reduced European Debt Concern, Mine Strike
  • Silver May Jump to $100, Citigroup Says: Technical Analysis
  • Sugar Heads for Fourth Weekly Gain on Tight Supply; Coffee Rises
  • Corn Trims Weekly Loss on Concern Dryness May Hurt U.S. Yields
  • Copper May Fall on Indications of Ample Supplies, Survey Shows
  • Beef Prices Seen Rising to Record as U.S. Cattle Herd Shrinks
  • China, Russia Cleared to Explore Pacific Seabed for Minerals
  • Posco Profit Rises on Steel Demand Recovery, Higher Prices
  • Mineral-Rich, People-Poor Mongolia Prepares for Flood of Money
  • European Commodity Day Ahead: Miners Strike at Escondida Mine
  • Raw Sugar May Fall Next Week on Climbing Supplies, Survey Says
  • Gold May Gain on U.S., European Debt Concerns, Survey Shows

CURRENCIES

  • EUR/USD - the intermediate-term TREND line of resistance for the Euro ($1.43) being tested and tried aggressively; if it fails here (and it should because the Europeans aren't going to have three hour bailout lunches every day next week - watch out below!

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • EUROPEAN SQUEEZE - there's no other way to describe what just happened in everything Italian, Spanish, or Greek; critically however, the TREND Lines for the IBEX, MIB, and ATG Indices are 10405, 20889, and 1346 - all remain decidedly bearish

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • ASIA: excellent session for Asian stocks to end the week with HK, KOSPI, and Sensex breaking out above critical lines of resistance.

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

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Howard Penney

Managing Director