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Futures indicate lower open

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Stock futures are lower across the board this morning and once again it looks like traders should be playing some defense and looking to hedge some of their long positions. Currently we're seeing S&P 500 futures trade lower by 7 points, NASDAQ futures are off 29 points and Dow futures are down 40 points. Fair value for the S&P 500 for today is $8.66 and this price will not change during the trading session. Computers are set for program buying at $10.16 and set for selling at $7.36. Fair value for the NASDAQ-100 for today is $18.25. For more information about fair value and buy/sell programs, jump over to www.programtrading.com.

Bond YIELDS lower

Lately we've been alerting bullish stock traders to be keeping an eye on bond YIELDS as they have been falling, indicating to us that money has been leaving stocks and seeking the safety of the U.S. Treasury bonds. This morning we are once again seeing bond YIELDS fall as money continues to flow into these securities. The shorter end of the three major YIELDS we monitor on an hourly basis throughout the trading session or the 5-year YIELD (FVX.X) is breaking upward trend on YIELD and this should have bullish stock traders playing some defense too. MACD on the 60-minute charting interval has been staying below the zero level since May 31st and current position of this indicator looks to be rolling over once again and may stay under the zero level for several sessions. Should bond YIELDS continue to fall; this would have many stocks (especially technology related) probably finding few buyers.

Traders that only trade bullish may want to consider today's play of the Day on OptionInvestor.com. There we've profiled shares of Forest Labs (NYSE:FRX). As a group, this may be where cash rotates in a more defensive market. After recently reaching a new 52-week high, shares of FRX have pulled back into a support level near $70 and could find buyers. This has been one of the stronger stocks in the Drug sector and makes sense in this market environment.

Those subscribers that liked the hot list from PremierMarkets.com will find the same hot list and commentary from it on OptionInvestor.com. the hot list is located on the front page and just above the "Daily Poll" question of the day box.

Jeff Bailey
Senior Market Technician

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