The Precise Take – Equity futures back to interim highs after Friday’s shakeout

Big Picture Analysis:  After Friday’s late recovery and overnight continuation, the ES finds itself back to the 1125-30 resistance band.  With bullish FOMC seasonality kicking in at the close today, there is a very good chance it will finally break through by tomorrow afternoon.  The markets have priced in a slight easing, and should get it tomorrow.  Later in the week, Retail Sales and CPI on Friday will be the focus. 1103.50 has become major support, so if the ES does head down again, it needs to hold or we’ll probably see the strong swing longs exit.

Leaders Analysis:  10 Year Treasury futures continue to attract money and rally, yet costing the equities rally virtually nothing.  To expand on what we wrote Friday, the correlation between equities and the yield (inverse to the futures price) is only loosely positively correlated; however, large moves in the yield are…

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