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TODAY’S S&P 500 SET-UP


As we look at today’s set up for the S&P 500, the range is 29 points or 1.4% (1,091) downside and 1.3% (1,120) upside.  Equity futures are trading above fair value more than making up for yesterday’s loss. 

Today will bring a slew of earnings releases and weekly jobless claims. 

  • Advance/Decline Line: -1086 (-726)
  • Volume: NYSE 1004 (-9.9%) - Volume is down DoD - yesterdays decline was on unconvincing volume.
  • Sector Performance: Every sector declined yesterday - 4 outperformed (RECOVERY/REFLATION trade underperforming - day 2)
  • Market Leading Stocks: Wyndham WW +8.0%, CB Richard Ell +7.5% and Eastman Kodak -15.2%, IGT -10.1%

Equity Sentiment:

  • VIX 24.25 (4.6%) - The VIX is broken on TRADE, but up for the last two days.
  • SPX Put/Call ratio - 1.99 up from 1.40 (low on 07/15/10 of 0.87)

Credit/Economic Market Look:

  • TED Spread - 32.3875 to 31.5519
  •  3-Month T-Bill Yield .14% to .15%
  • Yield Curve 2.3736 to 2.3843

Commodity/Growth Expectation:

  • CRB: 266.16 +0.64%
  • Oil: 76.99 -0.66% (down for 3 days)
  • Copper: 324.55 (1.22%) – looking to be up 8 of the last 9 days - trading above its TRADE line - BULLISH for growth expectations
  • Gold: 1,161 (0.09%) - Gold has decisively broken the Hedgeye intermediate term TREND line of support (1197); the long term TAIL of support -4.2% lower at 1115

Currencies:

  • EURO: 1.2997 (0.9%)  - Up 5 of the last 6 days - trading above the TRADE line
  • DOLLAR: 82.179 (-0.01%) - BEARISH formation

Overseas Markets:

  • ASIA - With the exception of China, most Asian markets declined today on soft economic figures from the US.
  • China on fire, closing up for the 8th out of the last 9 days, +0.55% on the Shanghai last night; still -19.1% YTD.
  • EUROPE - European markets are trading higher after a slow start as market participants digested a raft of corporate results and shook off mixed markets across Asia and disappointing US economic data. Pharmaceutical and telecom companies are amongst the leading gainers. Major indices trade just below session highs.
  • Eastern Europe surging - Russia up 1.7% and Ukraine up 1.2%.
  • Greece has finally traversed the Hedgeye TREND line of 1652; trading up +22% from the 6/7/10 bottom; monster squeeze.
  • LATIN AMERICA - Major indices are lower, with Venezuela and Brazil up 0.38% and 0.2%, respectively.
  • MIDDLE EAST - Mostly higher with the UAE trading down another 0.1% and Egypt up 1.4%. 

THE DAILY OUTLOOK - 1