1:11 pm EDT:  The Bernanke testimony provided some early volatility, but not too much as the projected range was fulfilled within a few ticks on each side.  Impressively  for the bulls, the ES has advanced and is now accepting above the projected range, but still below the value area highlighted below in magenta.  We said in the morning report that we wanted to see acceptance at about 1107.50 to facilitate the next multiday rally.  This is the high volume level for this value area and would indicate the ability to spring higher.  Until that happens, the shorts will hang on.  With the 5 Yr auction over and the ES having consolidated since the morning, we should now get an afternoon move.  1099 to 1100 should serve as support for day trade longs to hang on.  We no longer like a short from 1106.25 to 1107.50.

The Precise Take – Markets consolidating ahead of Bernanke testimony

Leaders Analysis:  The EuroYen sold off hard yesterday to strong support at the ~121.5 level.  The US Dollar had already made most of its up move by the open, but did manage to extend a bit on the equities selloff.  30 Yr T-Bond futures had a big up day, rallying to the 20 day moving average.  Overnight, all three are consolidating yesterday’s moves, and are equities neutral.

Medium Term Analysis:  Yesterday’s equities selloff was capped at about the 1090 level in the ES, which did not have much particular significance except that it was just below the lower end of the value area highlighted below in green.  Our hypothesis of the US Dollar topping this week (and supporting an equities rally) was based partly on a cooling of the Greece situation, which instead flared up again yesterday.  Accordingly, we no longer believe that…

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