Market Review

The Equity space finished last week with a mixed session with initial weakness at the US cash open being reversed as a result of earnings with Google and Microsoft gains offsetting IBM weakness following a barrage of Tech earnings on Thursday night. There was no economic data of any note on Friday and so it was again Eurozone monetary policy comments that shaped the session for the Euro as Schaeuble offset Weidmann's dovish comments from earlier in the week by recklessly saying the ECB should reduce liquidity in the Euro area which sent the Euro back above the 1.31 handle.

Today's Fundamental View

This morning has seen some reasonably positive equity markets being accompanied by some Euro weakness as ECB's other chief hawk Ausmussen echoed Weidmann over the weekend by saying that an ECB rate cut is possible if data warrants it. Perhaps the S&P has benefited from the capture of the second Boston bomber but this positivity has been offset by Caterpillar earnings that have disappointed the market across all fronts. The Italian political uncertainty continues despite the eventual re-election of President Napolitano and any headlines on this topic are potentially market moving. We will focus on the US Existing Homes Sales data due at 15.00BST but aside from this we expect the initial equity strength from this morning to be reversed and the Euro to remain under pressure due to rising rate cut expectations. Crude has been testing the key resistance just above the $89 handle and we see this holding and a move lower in tandem with stocks.

Alternative View

Bullish Existing Home Sales data may lift equities and create more of a risk-on move across the assets resulting in Euro and crude strength and T-Notes weakness.

E-Mini S&P 500 (Jun13) Futures

SP 500

StrategyNeutral - Entry Short
1st Target1551.25
2nd Target1544.50

Key LevelsComments
1563.50Wed Overnight Low
1557.50This Morning’s Day
1553.50Thursday’s High & R1
1551.25Morning Low
1544.50Pivot Level
1538.00Thursday’s Low & S1

AlternativeNeutral - Entry Long
1st target1568.00
2nd Target1570.75

EURUSD (Jun13) Futures


StrategyEntry Short
1st Target1.3051
2nd Target1.3006

Key LevelsComments
1.316527th Feb High & R2
1.3135Friday’s High
1.3100Thursday’s High
1.3089Overnight High & Pivot
1.3051Friday’s Low
1.3036Low of the Day
1.3006Last Weeks Low

AlternativeEntry Long
1st Target1.3135
2nd Target1.3165

US 10yr T-Notes (Jun13) Futures

T - Note

StrategyNeutral - Entry Long
1st Target132.290
2nd Target133.005

Key LevelsComments
133.075Thursday’s High and R2
133.040Friday’s High & R1
132.290This Morning’s Res
132.245Low of the Day
132.2358th March Low
132.21011th March Resistance

AlternativeNeutral - Entry Short
1st Target132.210
2nd Target132.165

Nymex WTI Crude Oil (May13) Futures

Crude Oil

StrategyNeutral - Entry Long
1st Target88.67
2nd Target88.12

Key LevelsComments
89.9615th March Res & Psych.
89.556th March Low
89.354th March Low & R2
88.67Fri/Today Res Area & R1
87.7661.8% Range Fib
87.3550% Range Fib

AlternativeNeutral - Entry Short
1st Target89.96
2nd Target90.27