The Precise Take – Consolidating with heightened volatility

Big Picture Analysis – While the futures are strong as we write, after first having taken out yesterday’s low, recent elevated daily range and reduced liquidity warrants caution.  It is simply taking less volume to push the markets around, which makes it easier to get trapped on the wrong side.  Shorts need to defend last week’s highs on any continued strength.  In the ES in particular, 1383-87 is strong resistance.  Acceptance above suggests the shorts have capitulated for the time being and trapped longs were not too eager to get out.  To the downside, 1360-63 is strong support, which the shorts will need to to decisively break to make a run at the March lows in the 1330′s.

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The Precise Take – Retail Sales leading indexes higher

Big Picture Analysis – Friday, sellers were in control until the close, though, overnight, the ES has bounced back again on a Retail Sales beat.  Earnings season continues, and the week is dotted with some housing reports and the Philadelphia Fed Survey on Thursday.  There are two economic releases today at 10:00 am EST–neither major, but could move the markets if out of consensus.

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The Precise Take – Bears need to assert

Big Picture Analysis – Yesterday’s trend day up retraced just over 50% of the down leg in the ES, but price has backed off a bit overnight having reached 1388.50.  Shorts need to defend 1390-94, and acceptance in this area or above suggests at least a test of prior highs, if not materially higher highs.  Consumer Sentiment (today at 9:55 am EST) is often a market mover when out of consensus.  Also, Bernanke speaks at 1:00 pm, followed by a Q&A session.

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The Precise Take – Opportunities emerge

Big Picture Analysis – While the current risk-off environment may continue, and develop from a short term to an intermediate term correction, our view of the long term bullish picture remains intact at present.  The ES could easily correct another 4-5% without disturbing the long term trend.  In the meantime, daily ranges with decent liquidity should provide many day trading opportunities.  The major news is out for the day, but there are Fed official speeches at 12:30 pm EST, 1:00 pm and 3:00 pm.  We normally don’t list these as market movers, but with the Fed floating rumors about steps it might take at its late April meeting, we should be prepared for potential leaks.

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The Precise Take – Consolidating after holiday jobs data

Big Picture Analysis – With no economic news out today, the markets are digesting Friday’s Employment Situation disappointment.  While we could see more downside, it’s also possible this was a holiday one-off, not dissimilar from the Dubai debt crisis of Thanksgiving weekend in 2010.

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The Precise Take – FOMC disappoints

Big Picture Analysis – The markets seem to have run (south) over the last few days with the notion that the Fed will not commence another LSAP in the near future.  While this may or may not be the case, we see it as a non-starter, inasmuch as money supply, loan and credit growth remain elevated and should put a floor underneath any correction, keeping the long term bull market intact.  Today, there are no economic releases of note after the bell, but we could see some squaring ahead of the quasi-three day weekend, especially since the monthly Employment Situation will be released tomorrow while equities are closed in the US and Europe.

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Note: we will be out next Monday and Tuesday, to return Wednesday

The Precise Take – Rebound into quarter end

Big Picture Analysis – After continued selling in the opening hour yesterday, the ES found its footing, and after the 7 year auction was over at 1:00 pm EST, a rally ensued into the close.  Additional gains were tacked on overnight such that, barring absolute disaster, this will end up one of the strongest quarters for equities in many years.  There are indeed potential headwinds (as there always are), but the global coordinated central bank intervention continues to support asset prices (at least in nominal terms).  The first 30 minutes could be dicey today, as Chicago PMI at 9:42 am EST and Consumer Sentiment at 9:55 am are often market movers when they are out of consensus, which is much of the time.

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The Precise Take – Approaching quarter end

Big Picture Analysis – As we write, the final GDP estimate for Q4 2011 came in at consensus, but Jobless Claims missed slightly, precipitating a further drop from European trading, that has the ES roughly testing yesterday’s lows.  The bearish seasonality from the 2, 5 and 7 year Treasury supply appears to have asserted this week, but may disappear after today’s 7 year auction is over at 1:00 pm EST.  No major news after the bell today.

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The Precise Take – Durable Goods disappoints

Big Picture Analysis – As we write, equity futures are down after the Durable Goods miss; however, strong support lies just below in the ES from 1397 to 1401.  EIA Petroleum Status today at 10:30 am could be a minor market mover.

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The Precise Take – Caveat venditor

Big Picture Analysis – Yesterday’s pre-market buying had significant upside follow through  in the ES, with the June contract hitting 1419.75 overnight.  The May 2008 interim high is about twenty handles north.  Whether or not the Fed will extend or invent another LSAP program is unknown, but what is undeniable is the continued high growth in money supply, consumer and industrial loans and bank credit.  Until this changes, it’s difficult to imagine more than an 8-9% correction taking hold over the coming months.  Though we’re heading into the 2, 5 and 7 year Treasury auctions beginning today, which historically has a bit of bearish seasonality, price action trumps seasonality, so sellers be cautious.  Consumer Confidence is out today at 10:00 am EST, along with two other minor reports.

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