Below are the leaders we follow.  The levels we wanted to hold this morning (whether support or resistance) for an equities reversal have been exceeded slightly, especially in the EuroYen as the risk trade unwinds, though the close today remains and we are still within error tolerances deemed acceptable for government work.  If the respective trends continue, we’ll watch for the EuroYen to find support at the 61.8% retracement (magenta horizontal line), the US Dollar Idx at the 77.00 level (top of yellow trend channel) and 30 Year yields to find support at the 20 and 50 day moving averages, which are about to cross.

10:48 am EDT:  New home sales disappointed a bit and Goldman lowered its estimate for tomorrow’s GDP, which lessens the likelikhood of short covering ahead of the report.  We’re still mildly short term bullish today as long as the S2′s hold at 1049.75 (actual low 1051.00), but would be quick to cover if the market retraces up to the 1059 to 1064 heavy resistance area.  If the S2′s break, the next downside target is very strong Fib confluence at 1043.75 to 1045.25.  Yesterday’s 2 Yr auction ended up being a market mover, so even more attention will be focused on today’s 5 Yr at 1:00 pm and caution is urged around that time.

The Precise Take – Leaders at turning points, ES oversold

Leaders Analysis:   The leaders are nearly all at potential interim reversal points, with 30 Year T-Bond futures up against its downward trend channel, the EuroYen nearing moving average and Fib support after a tremendous three day (4 big point) slide, and gold approaching its previous breakout area. 

Trading Today:  As we write, Durable Goods was in line with expectations this morning, so we expect a small short covering bounce today ahead of GDP tomorrow morning.  Accordingly, we would be early buyers anywhere down to…

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