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Futures fractionally lower

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Equity futures are tilting lower this morning with S&P futures trading down 1.2 points, NASDAQ futures are off 8.5 points and Dow futures are lower by 20 points. Today's fair value for the S&P 500 is $10.62. Computers are set for program buying at $12.24 and set for selling at $8.80.

5-year at good level for traders to monitor

The last 10 sessions have seen market participants start to gravitate back into bonds. One reason may be in order to try and dodge earnings warning season that has been upon the market the past couple of weeks. The current market environment is very similar to that found in early 1999 after the Fed had been lowering rates to help stimulate the economy and protect it against what was then called the "Asian Flu."

5-year YIELD Chart - last eleven months

The 5-year YIELD is sitting right on its downward trend, but remains above its 50-day MA (recently testes) and upward trend. Equity bulls want to see this yield rise and indicate selling in the shorter end of the bond market and the proceeds of those sales flow into stocks.

Jeff Bailey
Senior Market Technician

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