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Bond YIELDS higher early

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Bond YIELDS are higher this morning and I think there will be somewhat of a collective sigh taking place among equity bulls. Yesterday afternoon's recovery in the stock market came without so much as a hint of selling in the bond market and that has me thinking that yesterday's action was due to the upcoming triple- witching. There was "no reason" for stocks to turn like they did yesterday, but as we started looking at some stocks and securities and where some larger open interest was at, one could begin to think there were some large positions being unwound in the options market that a market maker may have had to take the other side of and create a mini rally for stocks.

Equity futures showing some gains

Equity futures are showing gains this morning with S&P futures trading higher by 2 points, NASDAQ futures are up 24 and Dow futures are higher by 4. Fair value for the S&P 500 today is $10.02. That price will not change during the trading session. Computers are set for buying at $11.22 and set for selling at $8.60.

Crude futures are on the rise

The July Light, Sweet Crude Oil Contract (CL01N) is on the rise once again this morning and this may have some of the energy stocks and energy service stocks perking up this morning. Yesterday PremierMarkets.com highlighted a bullish play in shares of Barrick Gold (NYSE:ABX) in our 09:30 EST update and one reason we still tend to like some exposure to the precious metals sector is for potential "fear" of inflation. It's our thinking (and we believe the charts continue to back it up) that there are some catalysts still current in the market that hint of future inflation and crude oil futures are part of that.

July Light, Sweet Crude Futures - last eleven months

The July contract broke above downward trend back in April, which correlates nicely with a surge in the Gold/Silver Index (XAU.X). This is a relationship that PremierMarkets.com has been studying and we do believe that a trader can be using this oil futures contract to help guide him/her with their trading in gold/silver stocks like Barrick Gold (ABX).

Jeff Bailey
Senior Market Technician

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