TODAY’S S&P 500 SET-UP - October 4, 2011


Yesterday’s “Short Covering Opportunity” call was Keith’s third in the last two months (August 8th and September 12th were the other 2 time stamps).   


As we look at today’s set up for the S&P 500, the range is 45 points or -2.49% downside to 1096 and 1.52% upside to 1141. 






THE HEDGEYE DAILY OUTLOOK - daily sector view


THE HEDGEYE DAILY OUTLOOK - global performance




  • ADVANCE/DECLINE LINE: 633 (-2498)
  • VOLUME: NYSE 1662.1 (+18.4%  )
  • VIX:  40.82 -10.2% YTD PERFORMANCE: +129.97%
  • SPX PUT/CALL RATIO: 2.00 from 1.97 (+1.5%)



  • TED SPREAD: 38.09
  • 3-MONTH T-BILL YIELD: 0.00%
  • 10-Year: 1.85 from 1.82     
  • YIELD CURVE: 1.60 from 1.57


MACRO DATA POINTS (Bloomberg Estimates):

  • 7 a.m.: MBA Mortgage Applications, prior 9.3%
  • 7:30 a.m.: Challenger job cuts, prior 47.0%
  • 8:15 a.m.: ADP employer, est. 73k, prior 91k
  • 10 a.m.: ISM Non-manufacturing, est. 52.8, prior 53.3
  • 10:30 a.m.: DoE inventories
  • 11 a.m.: U.S. to purchase $1b-$1.5b TIPS



  • Bank of New York Mellon sued by U.S., New York for allegedly defrauding clients in FX trades
  • Dexia shares rise as Belgium pledges to create a “bad bank” for assets, speculation that European policy makers mulling additional measures for region banks
  • Italy downgraded three notches by Moody’s; ratings agency says more downgrades in euro-region possible
  • Hewlett-Packard to decide whether to spin off its PC unit by end of month, CEO Meg Whitman said
  • EMI bids, due this week, said likely to come in lower than expected, people familiar tell Bloomberg
  • U.S. Trade Representative holds public meeting on China’s compliance with World Trade Organization commitments
  • Cisco CEO John Chambers, Oracle CEO Larry Ellison speak at Oracle Openworld
  • Bill Ackman said he may sell shares in a hedge fund to secure more permanent capital for investments as soon as next year.
  • Kinetic Concepts said to host lender meeting today to discuss refinancing


COMMODITY/GROWTH EXPECTATION                                                                    


GOLD – Hedgeye made a short call in Gold yesterday (before the down move) as Gold failed at the intermediate-term

TREND line of resistance ($1672); first support = $1573 and the long-term TAIL of support is all the way down at $1491; KM expects Gold to come under increasing selling pressure as 2yr UST rates hold the TRADE line of 0.21% support.


THE HEDGEYE DAILY OUTLOOK - daily commodity view




  • Commodities Climb From 10-Month Low as Bernanke May Buoy Growth
  • OPEC Risks Bear Market as Libyan Output Recovers: Energy Markets
  • Copper Rout Unlikely to Halt Chile $67 Billion Bet: Commodities
  • Indonesia May Sell More Palm Oil to China, Hurting Prices
  • Gold Declines in London as Dollar’s Rally Cuts Investor Demand
  • Corn Gains on Speculation 26% Slump May Attract China Purchases
  • Sugar Advances as Lower Prices May Spur Buying; Coffee Climbs
  • Copper Rises on Speculation Officials Are Set to Stoke Recovery
  • Commodities to Rally in ’12, Says Credit Suisse Joining Goldman
  • Silver Rebound May Stall at $33.15 an Ounce: Technical Analysis
  • Australian Grain Regions May Get Crop-Boosting Rain This Week
  • Chile’s Richest Family Risks Golden Touch With Shipping: Freight
  • Komatsu Risk at 2-Year High on Yen, Economic Slump: Japan Credit
  • Oil Rises From Lowest in a Year on Supply Drop, Stimulus Hopes
  • Palm Oil Drops to 1-Year Low as Malaysian Reserves Set to Climb
  • Rubber May Extend Drop to Lowest Since 2009: Technical Analysis




THE HEDGEYE DAILY OUTLOOK - daily currency view





The Russian stock market crash matters; the RTSI is flagging a negative divergence vs the rally in Europe DAX to lower highs; Russia = down -1.6% this morn and down, get this, -43% since April when the down Dollar/up inflation trade stopped! Get the USD right; you’ll get a lot more right.


THE HEDGEYE DAILY OUTLOOK - euro performance





THE HEDGEYE DAILY OUTLOOK - asia performance









Howard Penney

Managing Director



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