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TODAY’S S&P 500 SET-UP - November 23, 2011

As we look at today’s set up for the S&P 500, the range is 21 points or -0.93% downside to 1177 and 0.84% upside to 1198. 


With the SP500 down for 5 consecutive days and down -5.2% for November (down -7.9% from OCT28 intraday peak of 1290), it should be no surprise to see the deterioration in our S&P Sector Studies. All 9 Sectors are Bearish TRADE; 3 of 9 Bearish TREND; 8 of 9 Bearish TAIL.

With this week’s TREND breakdown (1203), the SP500 itself is back into what we call a Bearish Formation (all 3 risk management durations are bearish). The only sector that’s bullish TREND and TAIL is Utilities (XLU), which is up +7.8% YTD.

Financials (-24.3% YTD), Basic Materials (-15.6% YTD), and Industrials (-8.4% YTD) tell you all you need to know about the double edged sword of Growth Slowing and Correlation Risk. We’ve been calling for both.

We remain bullish on the US Dollar and ultimately think that will provide a tailwind for US domestic Consumption stocks in both Consumer and Healthcare sectors. These stocks/sectors finding higher-lows will take time. Bottoms are processes, not points.



THE HEDGEYE DAILY OUTLOOK - daily sector view


THE HEDGEYE DAILY OUTLOOK - global performance



  • ADVANCE/DECLINE LINE: -708 (+1449) 
  • VOLUME: NYSE 878.19 (-5.80%)
  • VIX:  +31.97 -2.86% YTD PERFORMANCE: +80.11%
  • SPX PUT/CALL RATIO: 1.66 from 1.81 (-8.70%)



TREASURIES: Growth Slowing? 10yr bonds ripping a move to 1.90%; 30yr 2.87% and Yield Spread collapsing to +164bps wide

  • TED SPREAD: 49.01
  • 3-MONTH T-BILL YIELD: 0.02%
  • 10-Year: 1.94 from 1.97   
  • YIELD CURVE: 1.71 from 1.67


MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, (prior -10.0%)
  • 8:30am: Durable Goods, est. -1.2% (prior -0.8%)
  • 8:30am: Personal income, est. 0.3% (prior 0.1%)
  • 8:30am: Personal spending, est. 0.3% (prior 0.6%)
  • 8:30am: Initial jobless claims, est. 390k, prior 388k
  • 9:45am: Bloomberg Consumer Comfort (prior -50.0)
  • 9:55am: UMich Confidence final, est. 64.5 (prior 64.2)
  • 10:30am: DoE inventories
  • 11am: Kansas City Fed, est. 9, prior 8
  • Noon: EIA natural gas storage
  • 1pm: Baker Hughes rig count



  • Delta, US Airways expected to find out which of their rivals won auctioned landing slots at LaGuardia, Ronald Reagan; watch Southwest, JetBlue
  • Orders for durable goods other than transportation stabilized in Oct. after rising most in 6 months, separate figures may show
  • China passed U.S. to become world’s largest smartphone market by volume in 3Q: Strategy Analytics
  • U.S. markets closed Thursday for Thanksgiving holiday



  • Coffee Supply Crunch Spurs Rally After Folgers Cut: Commodities
  • Australia Faces Wheat Export Challenge as Rain Hurts Crop
  • Gold Advances as Global Debt Risk Drives ETP Holdings to Record
  • Golden Agri Forecasts Higher Palm-Oil Output on Expansion
  • Turkey Farmers Lose Out on Thanksgiving Rally as Corn Costs Rise
  • Palm Oil Declines for Third Day on Concern World Growth Slowing
  • South Korea Buys 3,000 Tons of Malaysian Aluminum in Tender
  • Soybeans Decline to 13-Month Low as Supply Prospects Improve
  • Copper Declines on Sign China’s Manufacturing May Contract
  • Oil Drops on Rising U.S. Fuel Supplies, Slowing Economic Growth
  • Sugar Mills Expect India to Allow More Exports Next Month
  • Sugar in China May Extend Decline on MACD: Technical Analysis
  • Diesel Becomes ‘Global Issue’ as Premium Soars: Energy Markets
  • Australia Lower House Passes Mining Tax as Greens Back Bill
  • ‘Absolute Fear’ Saps Commodity Open Interest: Chart of the Day
  • Copper Rises Most in a Week on Signs China’s Demand to Climb
  • Vale Says Galilee Miners Need to Build Joint Rail to Save Costs
  • Copper in London Falls by 0.3% to $7,305, Reversing Gains
  • Cocoa Arrivals From Brazil’s Bahia Advance 11%, Hartmann Says
  • Oil Gains First Day in Four on Iran Sanctions and Egypt Protests
  • Wheat Drops as U.S. Exports Slow on Ample Global Supplies

THE HEDGEYE DAILY OUTLOOK - daily commodity view


THE HEDGEYE DAILY OUTLOOK - daily currency view


EUROPE: remains no bid - lower-highs on low volume rallies and threats for lower-lows

THE HEDGEYE DAILY OUTLOOK - euro performance



ASIA: do up your chinstraps b/c Asian Equities are crashing, again - HK (were short) down another -2.1% (down -26.8% from YTD high)

THE HEDGEYE DAILY OUTLOOK - asia performance


  • Arab World’s Former ‘Club of Tyrants’ Turns Against Syria
  • Gingrich Immigration Plan Derided as ‘Amnesty’ in Debate
  • Egypt Army Pledges Transition as Protesters Gather in Cairo
  • Australian Banks Ready First Sukuk on Tax Vote: Islamic Finance
  • Egypt Dollar Bonds Tumble as Tantawi Promises a ‘Step Backward’
  • Qatar Said to Hire 6 Banks for Meetings With Bond Investors
  • Saudi May Struggle to Boost Small Business Lending: Arab Credit
  • Oil Gains First Day in Four on Iran Sanctions and Egypt Protests
  • Iraq’s Lafarge-Run Cement Plant Plans to Triple Production
  • Dubai’s Al Wasl May Close as Stocks Retreat to 2004 Low
  • Iraq Has Told Exxon It’s in Breach of Laws, Shahristani Says
  • Oil Abundance in Canada Provokes Anxiety Over Fossil Fuel Lust
  • U.S. Targets Iran Oil, Bank in Bid to Halt Nuclear Program
  • Saipem, Petrofac ‘Well Positioned’ if Saudi E&P Cut: JPMorgan
  • ADIB Prices $500 Million Sukuk at 245 Basis Points Above Midswap
  • Abu Dhabi’s Masdar Cuts Jobs, Keeps Renewable Energy Goals
  • Abu Dhabi Index Heads for Lowest Since 2009 on Global Growth


The Hedgeye Macro Team

Howard Penney

Managing Director