10:10 am EDT:  Though the ES opened above day-session-only R1 (1101.00), it had not held into the open (breached just prior) as we wanted to see.  This suggested there would be a return to the value area from 1097.25 to 1099.25, which did serve as support.  The news has been very good for the bulls today, but the US Dollar albatross now hangs around their necks as it has broken to the upside.  Unless it reverses strongly soon, which is unlikely, this will hold back equities today.  If the ES heads back down to value support, it is not as likely to hold, so we will be quick to cut losses on any [new] longs there.

The Precise Take – ES needs to show strength after positive Retail Sales

Leaders Analysis:   Long term yields are on the march, with a target on the 30 Yr of 4.60%.  At that point, we would expect to see an equities pause (if a rally develops), perhaps around next week’s FOMC meeting.  The Euro Yen is up materially overnight to minor resistance.  The US Dollar is consolidating in a wedge pattern, so we will focus on it today to see if there’s a breakout in the next few hours.  Overall, though, the leaders are equities bullish.

Medium Term Analysis:    Looking to the news calendar next week, Monday is vacant, and focus will be on CPI and the FOMC Announcement Wednesday.  The Fed is unlikely to make any waves, but there is the possibility of a dissent, which would probably not be revealed until the Minutes are released many weeks later.  If equities can manage another rally, there should not be any serious impediments until next Friday’s quadruple witching.

Trading Today:  We’re basis Mar 10 now.  As we write Retail Sales delivered positive headline numbers (including ex-autos), but the concurrent Import/Export report hints at inflation.  The ES made a marginal new high and has backed off a bit.  The preferred early trade is to…

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