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Stocks look to build gains

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Stocks look to build gains from Friday as equity futures are higher across the board this morning. Treasuries are finding sellers as YIELDS jump higher across the major maturities.

S&P futures (sp02u) are trading up 16 points at 8,091, NASDAQ futures (nd02u) are higher by 23 points at 935.50 and Dow futures (dj02u) are up 138 points at 8,405.

Fair value for the S&P 500 today is $0.82. That price will not change during the session. HL Camp & Company has their computers set for program buying at $2.42 and set for program selling at $-2.42. Fair value for the NASDAQ-100 today is $3.12.

The YIELD on the benchmark 10-year ($TNX.X) 4.452% edged just above Thursday's high YIELD of 4.457% earlier this morning. The shorter-term 5-year YIELD ($FVX.X) 3.473%, which would be considered a "safer" bond than the longer-term 10-year is also seeing a strong round of selling in early trading. This action hints that some cash is indeed moving toward equities.

While equity futures see buying and Treasuries find sellers, the U.S. Dollar Index (dx00y) 107.01 +0.34% is seeing some buying. At current levels, the U.S. Dollar Index has not seen these levels since July 2. Near-term resistance would be the July 2 high of 107.69 with retracement resistance just above at 108.50. A move much above the 108.50 level could be sign that foreign capital is making a more asserted move back into U.S.-based assets.

News of corporate stock buybacks may help sentiment

Publicly traded companies announced stock buyback programs totaling $43 billion in July, which is about $10 billion shy of their post September 11th $53.6 billion stock buyback programs. Analysts say this could boost or help firm stock prices over the next couple of weeks as company's often buy back anywhere from 15% to 25% of their announced programs in the first couple of week's of the stock buyback program.

Jeff Bailey
Senior Market Technician
Option Investor

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