Jun 242010

The market always knows as they say. Institutions held the VPOC steady in the mixed trading yesterday and bought that level on heavy relative volume. Overnight their participation in the sell-off was tepid at best and post-news they have led the rally in offer lifting deltas. It will be interesting to see how the area around yesterday’s VPOC and pivots today will be treated at 87-88. The jobs number while a bit lower at 457 was expected and may be signaling some slowing in the bleak employment picture. Durable goods was basically unremarkable as far as the market is concerned. I think the market was looking for some decency in the jobs and got it. But don’t be too quick to settle in with a negative bias. The Fed yesterday for the first time didn’t “upgrade” the economy since the recession started and I think they still have good reason. The jobs is the tip of the iceberg and the market will wake up again shortly. The bid has returned to the bonds and the carry trade gets the perfect storm of a weak Euro and strong Yen which is the recipe for risk aversion. Follow the money. The key levels to watch for some leading in the ES today are 22 ½ in the Euro which is a key support that will be very bearish if broken. Same deal with oil which is still trending down steadily which is of course bearish for equities as well. Pay attention to 75.50 in crude today as well. I don’t think we will see much in the way of any giant moves today and as such conditions should be good for rotational activity around key levels. Finding traction above 88 is important to the health of equities and ultimately 95-96 is the line in the sand for the bulls. I do think there is strong support at around 67 and if there was such a thing as a relatively sure rotation it would be there today if we did get down that far. Same goes for 95-96 or so, but we may not see either of them. We shall see…

 Posted by at 9:12 am

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