The Precise Take – Equity futures higher overnight ahead of ISM

Leaders Analysis:  After selling off to its 20 day moving average Friday, the US Dollar Index rallied strongly overnight on British Pound weakness to the upper end of its two week range.  The EuroYen traded first up, then down, and is at Friday’s low.  The 30 Year T-Bond yield closed decisively below long term trend line support Friday and is up marginally on the open.  A continuation of the trend down in yield (and up in the futures) does not preclude equities gains, but a concurrent US Dollar rally would make any equities gains more difficult to come by.  With ISM Manufacturing today, the direction could be set into Friday’s Employment Situation report.  For now (at least until 10:00 am), the leaders are slightly equities bearish.

Medium Term Analysis:  The ES was strong enough overnight to test the most recent swing high at 1112.75 and subsequently traded down on the US Dollar rally.  However, it is accepting in the green value area (below).  If it continues to accept here or rally after ISM today, the next…

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