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Market Updates

10-year YIELD takes out recent high

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Futures mixed

Equity futures are mixed this morning with S&P 500 futures lower by 2 points and Dow futures are down 36. NASDAQ futures are bucking the trend and are currently up 7 points. Fair Value on the S&P 500 for today is $4.12. Computers are set for buying at $5.42 and set for selling at $2.42. For more information regarding fair value and buy/sell programs, please visit www.programtrading.com

Treasuries also showing mixed results

The bond market opens before stocks and currently we're seeing mixed results for YIELD. The bond we've been focusing on most recently has been the 10-year YIELD as it continues to trade very close to our "waterline" or a level we feel can help give the trader a feel for bullishness or bearishness toward stocks. On Friday, the 10-year (TNX.X) dropped precipitously below our waterline of 5.2% to 5.081%, but the YIELD rallied back during the session (selling in this bond) and now stands at 5.201%. I think it's going to take a 10-year YIELD above 5.255% to really get things going for stocks today. We'll be watching this action closely in the hot box.

Current Strategy on PremierMarkets.com

On Friday we thought a short in Dow component General Electric (NYSE:GE) would be a good idea on a break below $48, but we dropped that thought when the stock traded above the $49.50 level. We continue to like Dow components Wal-Mart (NYSE:WMT) and longer time frame call options. We also recently profiled Dow Component Du Pont (NYSE:DD) and the July 45 calls (DDGI). Last Thursday, we thought a put on the QQQs would be a good idea and that was looking very good Friday morning until the broader markets turned higher. We still like the QQQs short/put as a hedge for a trader to manage risk in his/her portfolio. The bullish percent for the NASDAQ-100 stands at 72% and remains in a column of O's.

Jeff Bailey
Senior Market Technician
www.PremierMarkets.com

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