THE HEDGEYE DAILY OUTLOOK

THE HEDGEYE DAILY OUTLOOK

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

Do not buy this dip. This is not a dip.

As we look at today’s set up for the S&P 500, the range is 40 points or -2.21% downside to 1141 and 1.22% upside to 1181.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - hrmsv

THE HEDGEYE DAILY OUTLOOK - bpgm1

THE HEDGEYE DAILY OUTLOOK - sv

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -2152 (-1338) 
  • VOLUME: NYSE 1210.29 (+20.66%)
  • VIX:  37.32 +13.57% YTD PERFORMANCE: +110.25%
  • SPX PUT/CALL RATIO: 2.66 from 1.91 (+38.96%)

 

CREDIT/ECONOMIC MARKET LOOK:

FIXED INCOME: by our score this is a 3.7 standard deviation move in 10yr UST bonds; Bernanke made the entire fixed income complex go haywire.  The 10 year yields making lower-lows is very bearish for both economic growth and confidence.

  • TED SPREAD: 35.80
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 1.88 from 1.95     
  • YIELD CURVE: 1.67 from 1.77

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 a.m.: Jobless claims, est. 420k, prior 428k
  • 9:45 a.m.: Bloomberg consumer comfort, prior (-49.3)
  • 10 a.m.: Leading indicators, est. 0.1%, prior 0.5%
  • 10 a.m.: House price index, M/m, est. 0.1%, prior 0.9%
  • 10 a.m.: Freddie Mac mortgage rates
  • 10:30 a.m.: EIA natural gas storage
  • 1 p.m.: U.S. to sell $11b 10-yr TIPS reopening

 WHAT TO WATCH:

  • United Technologies agrees to buy Goodrich for $16.5b, or $127.50-shr
  • Hewlett-Packard’s board said to meet today; said to plan to consider firing CEO Leo Apotheker
  • Hewlett-Packard deal to buy Autonomy will still go through, absent “material adverse change,” even if CEO ousted: Bernstein
  • Australian dollar drops to parity with U.S. currency
  • LivingSocial may seek more than $200m in private funding rather than seek IPO
  • Mosaic to replace National Semiconductor in S&P 500

COMMODITY/GROWTH EXPECTATION

COMMODITIES: crashing Copper looks like the Hang Seng this morning; down -5% in a straight line and down -21% since QE2 (Februray)

OIL: is in what I call a Bearish Formation - bearish on all 3 of my risk management durations (TRADE, TREND, and TAIL)

GOLD: this is key and why I don't own it; now Gold becomes a source of liquidity for any Global Macro hedge fund; $1821 support broke

THE HEDGEYE DAILY OUTLOOK - dcommv

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Iron Ore’s Four-Year Slide Hitting Mining Earnings: Commodities
  • Gold’s Price Surge Skews Inflation Numbers Across Asia
  • Commodities Erase This Year’s Gains as Slowdown Concerns Swell
  • Oil Drops to Four-Week Low as Fed Sees Downside Risks to Economy
  • Managers Prefer Gold to Bonds on Faster Inflation: India Credit
  • Copper Slumps Into Bear Market as Fed Assessment Hurts Outlook
  • Gulf Cargo Gap Spurs Dubai-Abu Dhabi Rail Link: Freight Markets
  • Foreign Investor ‘Land Grabs’ Harm Poor Farmers, Oxfam Says
  • Copper Declines to One Year Low as China Manufacturing Contracts
  • Metal Price Drop Attracts Buying by South Korea State Agency
  • Pakistan to Boost Palm Oil Imports From Indonesia on Tax Cut
  • Copper Falls to 10-Month Low on U.S., China, Europe: LME Preview
  • Commodity-Ship Demolitions to Be Record in 2011, Bimco Says
  • Sime Darby Sees Higher Palm-Oil Production as Yields Improve
  • Rubber Tumbles to 10-Month Low as Economic Risk May Cut Deman
  • China’s 2020 Corn Imports May Be 20 Million Tons, Cofco Says
  • Brazil Sugarcane Harvest May Fall 10%, Rabobank’s Duff Says
  • Bullion Vaults Run Out of Space as Gold Rallies: Commodities

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - dcurrv

 

EUROPEAN MARKETS

EUROPE = train wreck - Period.  If you're a European country index down -3% this morning you are outperforming!

Russia is called a “Petro-Dollar” market; this stupid twist is Dollar bullish; Dollar bullish bearish for Oil, bearish for Russia

GERMANY: down -3.9% as the DAX fails at its immediate-term TRADE line of 5480; no support to 5019 - could re-test the lows.

THE HEDGEYE DAILY OUTLOOK - bpem1

ASIAN MARKETS

ASIA: put the crash helmets back on and do up your chinstraps; Indonesia was down -8.9% last night; Hong Kong down -5% moves into crash mode

THE HEDGEYE DAILY OUTLOOK - bpam1

 

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - me

Howard Penney

Managing Director