The Precise Take – Equities maintaining highs on options expiration Friday

Leaders Analysis: 30 Year T-Bond futures were able to post sizable gains yesterday on equities intransigence.  The EuroYen was up again, able to pierce resistance from earlier in the month, but not able to break through it (similar to crude), with gold posting nominal new highs.  The 30 Year has consolidated since June, and it is the 30 Year that we believe will be the ultimate confirmation of a top in equities (should it ever come), with a break of the 121 to 122 resistance area as such confirmation.

Treasury Update:  We will be posting an update by noon today that explores further the $185 wind down of the Treasury Supplementary Financing Program, next week’s Treasury Auctions and recent developments in the monetary base and money supply.  Subscribe for free updates here.

Medium Term Analysis:  We had given equities until yesterday to confirm an interim top, and such confirmation did not come.  Accordingly, while a correction is always possible given the house-of-cards nature of this rally, we must look upwards to the next price target of 1126.25 over the coming weeks.

Trading Today: Today is quadruple witching options expiration and, with the exception of the August opex trading day which was able to clear overhead resistance, the others in this 2009 rally have been below average range.  Accordingly, we are not expecting a volatile day and will… 

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