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Stock futures edge lower with dollar

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Stock futures hint of a lower open this morning as the U.S. dollar falls to new lows versus the euro, which added to overnight gains and was holding above $1.11.

Currency analyst's are saying that the dollar was most likely under pressure ahead of this weeks U.S. employment report on Friday, where the Labor Department will report a plethora of data for April including nonfarm payrolls, unemployment rate, hourly earnings and average workweek. Tomorrow, the Labor Department will report weekly jobless claims for the week ended April 26, where economist's are forecasting a decline of 20,000 to 432,000 after last week's large rise to 455,000.

A report in this morning's Wall Street Journal that Tyco (NYSE:TYC) $15.37 is set to disclose roughly $1.2 billion in accounting problems when it announces Q2 earnings on Thursday has the stock lower at $14.31 over the New York ECNs. The Wall Street Journal reports that its sources are saying the additional $1.2 billion in new accounting problems on top of an additional $265-$325 million charges announced back in March, will bring a total quarterly charge to about $1.5 billion or more. It was not clear if the charges would impact this quarter, or be taken over prior quarters in the form of a restatement of earnings.

S&P futures (sp03m) currently trade down 2.1 points at 914. NASDAQ futures (nd03m) are lower by 3 points at 1,113.50, while Dow futures (dj03m) are down 36 points at 8,441.

Fair value for the S&P 500 today is $-0.52. That price will not change during the session. HL Camp & Company has their computers set for program buying at $4.92 and set for program selling at $-1.97. Fair value for the NASDAQ-100 today is $2.00.

While the dollar sees weakness with the U.S. Dollar Index (dx00y) 97.55 -0.46% now trading at multi-year lows, Treasuries are finding fractional selling in their early trade. The 10-year Treasury June futures contract (ty03m) $114'140 -0.08% is off 3/32, with the benchmark bond's YIELD ($TNX.X) rising to 3.947%.

Yesterday's trade saw the NASDAQ-100 Bullish % ($BPNDX) find a net gain of 2 stocks to new point and figure buy signals, and this has our most important indicator for assessing risk in the NASDAQ-100 now moving to the longer-term "overbought" 70%. In March, this indicator fell to the longer-term "oversold" level of 30%, which put bearish traders at a higher degree of risk, and yesterday's action now has bulls on the alert that the NASDAQ-100 internals, while strong, are also moving into a higher risk category and overbought. This should have NASDAQ-100 bulls, along with some technology stock traders, at LEAST moving OFF of margin in their trading accounts and looking to capture/protect bullish gains. Stocks that extends well above recent point and figure buy signals, or those stocks that have achieved either bullish pattern probabilities from Professor Davis' Purdue University study, or have achieved bullish vertical counts should be the first focus point of bulls to protect.

Jeff Bailey

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