Today's Market Guidance

Financail Overview:
The US stock market looks to be set to start the trade today on a positive footing. While the market might eventually gain momentum and forge a moderate rally today, the initial setup isn't completely favoring the bull camp. For instance, the Chinese equity market action overnight was somewhat troubling, as the trade in that region continued to fear government efforts to restrict Chinese real estate activity. However, the Asian markets were already entrenched in a slightly bearish tilt and therefore didn't get as much of a benefit from the news that the Greeks were officially going to ask for aid. Apparently the markets are viewing the official request as a positive, as asking for the aid could have confirmed to some that the credit crisis is indeed real and potentially the first of other travails in the Euro zone. However, the market is initially taking the latest iteration as a positive and that in conjunction with up beat UK Prime Minister economic comments, a positive German Ifo result and the expectation for positive US scheduled data later this morning, that leaves the bull camp in control. However, we get the feeling that the bull camp isn't totally into the upside tilt and that buying interest might dry up this morning after another run to new highs for the year.

Dow:
The June Mini Dow is poised for a move to new highs for the year but we think that the market is in need of a lot of bullish headline fuel in order to make and sustain gains on the upside. We are a little concerned that the US equity market saw its first disappointing earnings report yesterday, but the reaction to the US durable goods and new home sales reports this morning will be very telling. If minor improvements (as expected) are seen in the data this morning and the Mini Dow manages to forge a small upside extension off that data, we would expect the bull camp to be able to control for the rest of the trading session. Initial resistance today is seen at the old high of 11,103 and we suspect that level will fall early.

The daily stochastics have crossed over up which is a bullish indication. Rising stochastics at overbought levels warrant some caution for bulls. The market's short-term trend is positive on the close above the 9-day moving average. The upside daily closing price reversal gives the market a bullish tilt. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside target is at 11186. The next area of resistance is around 11136 and 11186, while 1st support hits today at 11000 and below there at 10914.

S&P:
The June S&P was showing a positive tilt in the early action today, as the markets were initially embracing the latest EU debt event as a modestly positive event. We get the sense that this market remains skeptical about the EU situation remaining positive through out the day and we also get the sense that this market remains skeptical on the capacity to recover and therefore the bull camp doesn't appear to have much capacity to digest negatives. In short, the bulls control early, but they probably need a perfect storm of favorable US numbers this morning to keep control. Initial resistance is seen at the old high of 1210.40 but also at this week's high of 1209.40.

Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. A positive signal for trend short-term was given on a close over the 9-bar moving average. The daily closing price reversal up is a positive indicator that could support higher prices. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is 1178.44. The next area of resistance is around 1212.12 and 1219.93, while 1st support hits today at 1191.38 and below there at 1178.44.

Nasdaq:
While Microsoft posted positive earnings, the market was apparently expecting the software giant to perform even better in the wake of the stellar performance in the rest of the tech sector. Therefore the bias in the Nasdaq is pointing higher, but there are some detractors that are worried about valuations. However, in the event that the Greek debt request is allowed to remain a positive in marketplace into the US opening today and given positive readings from both US reports this morning, we suspect that the prior session's high will be taken out and the market might attempt to retest the 2050 level.

Bonds:
The Treasury market enters the Friday trade right around the prior session's lows and roughly 23 ticks below the prior session's highs. While the anxiety toward the Greece situation appears to be down shifted this morning, a statement from the Greek Finance Minister this morning has some markets frozen in place. However, the UK Prime Minister this morning suggested that the UK recovery was 'definitively Under way' and that in conjunction with an official request for aid from the Greeks might allow for an overall improvement in global economic psychology. While credit spreads seem to have fallen back in their initial response to this morning's news, there is no way to determine if the Greece debt situation is going to remain under control. In the short term, it would appear that flight to quality interest in Treasuries is set to wane a bit and that could leave the focus of the market on the pace of the US economy. However, it should also be noted that the Ifo overnight noted a rise in German expectations and suggested that German companies were much more confident than in their prior survey. In short, the Treasuries are seeing a general improvement in global economic sentiment and since the US economic report slate this week has been very thin, that could make this morning's US Durable goods reading even more important. Expectations generally call for a modest rise in both Durables and new home sales and as long as the readings are positive, we suspect that the trade will see them as bearish to Treasury prices. However, as suggested already we aren't sure that the market will be able to migrate away from EU zone flight to quality focus. In an added negative development, the markets have also been presented with news of another record weekly auction supply next week and that might be serving up a bit of pressure on Treasury prices. The bull camp might also attempt to hang onto the idea that inflation remains under control and that the recovery is likely to be uneven. However, we suspect that the bear camp will be able to exert some control today, but unless both scheduled reports this morning from the US are slightly above expectations, we are not sure that June Bonds are going to markedly fall below the 117-00 level, with June Notes potentially seeing some initial support around the 116-18 level. The biggest influence on the magnitude of movement in the Treasury market this morning, might be the equity markets, as a big rally in the US equity markets would accentuate the recovery expectation, while a minor decline in US equities today might serve to fully mitigate the impact of positive scheduled US data flow. Given the lack of initial downside this morning, in the wake of the initial news on Greece we expected more downside movement in bonds and notes and since ranges have been narrow, we are doubtful that June bonds will manage a slide to more significant support down at 116-26 in June bonds and down at 116-15 in June Notes. The bears have the edge, but it still feels like they will need a perfect storm of a smooth Greek aid request, favorable US scheduled numbers and positive equity market action to forge a distinct move lower on the charts today.

Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. The downside closing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside target is at 118-050. The next area of resistance is around 117-210 and 118-050, while 1st support hits today at 116-300 and below there at 116-220.

US Dollar:
News reports that Greece has made a formal request for an EU/IMF aid package this morning has clearly undercut the Dollar's recent strength. Although there are plenty of potential pitfalls still along the way to a final resolution, it is clear that European officials are taking steps to make sure that any agreement is approved, with as few problems as possible, particularly after difficulties produced by the recent volcano-related travel problems in Europe. The clear move in the overnight markets away from risk aversion, shown by overnight recoveries in the Euro and Canada, along with a downturn in the Yen, could also help to keep the Dollar somewhat on the defensive this morning. However, it could take a definitively strong US Durable Goods number today to lend even more support to US equity markets, which in turn could add to the Dollar's weakness. If the substance of the announcement this morning fails to match the initial market reaction, we may see a Dollar revival later today but the severity of the overnight move shows that the market clearly now is leaning in a Dollar bearish position.

Euro:
After the June Euro traded at its lowest levels for nearly a year, the news that Greece has asked for the EU/IMF aid mechanism to be triggered has been the catalyst for an overnight recovery attempt. Considering that negotiations between the two sides were expected to go on for at least another week, and there are serious potential difficulties with the aid package being approved by Germany and Belgium, the June Euro may have gotten ahead of itself with the initial bounce. While the June Euro has not shaken off all of the potential problems with sovereign debt, the market euphoria produced by today's events should be able to keep prices supported for the balance of the morning. However as in the Dollar, the Euro trade will need to see something helpful from the US numbers and from the US equity market to make the events this morning stick.

Yen:
Much of the pressure on the June Yen has come from the Greece aid package announcement, as the Yen was benefiting from the recent risk aversion phase in the markets. Even with the additional support from the impending Chinese Yuan revaluation, prices have fallen back towards the 107.00 level, as the market is leaning towards lower Japanese interest rates, as a stimulus for their economy. If the Euro hoopla continues, look for the June Yen to extend its move below 107.00 during the rest of today's trading.

Gold:
Indian gold prices were slightly lower this morning, as that market was simply marking time ahead of the rumored Greek debt request. However, after it became clear that the Greeks were officially requesting help, the gold market wasn't lifted markedly and of this writing the trade didn't appear to have carved out a distinct reaction to this morning's news flow. It does appear as if the gold market is watching the equity market action closely and given the action in gold over the last 48 hours, some traders are suggesting that gold needs something positive from the US scheduled data flow this morning to keep the fears of a weaker Euro from undermining gold prices again. Fundamentally gold continues to show marked strength in various currencies, but some longs are afraid to come in off the sidelines until the EU situation is under more control. Comex Gold Stocks were 10.152 million ounces up 1,173 ounces.

Silver:
With initially softer silver prices this morning, it would not seem like the initial news flow from the Greece situation has provided an all clear signal. With platinum prices showing some weakness this morning, after a stellar week of gains, that would seem to present a marketplace in a profit taking posture. However, silver, platinum and copper have taken a lot of direction from the equity markets this week and that pattern might continue today. Given the choppy nature of the early price action in silver, it is also possible that the scheduled report flow from the US will be given a little added amount of attention later this morning. Comex Silver Stocks were 115.333 million ounces down 68,183 ounces and some in the bull camp might say that silver stock changes at the end of this week were slightly supportive, especially since silver stocks have now declined in 11 of the last 20 days.

Crude Oil:
With most of today's market ranges occurring in the wake of this morning EU/IMF debt aid announcement, it is clear that the market needs to see continued positive news from the demand side of the equation in order to sustain June crude oil prices close to the $84 level. With the energy market still trying to cope with the high storage levels indicated by this week's inventory reports, the turnaround in equity markets on both sides of the Atlantic should provide decent support to the market. Less weakness in European currencies could also take some pressure off energy prices, but to see currencies help crude today would mean that the Euro would have to drive up into positive ground. In the end, the outside market influence on energy prices today will be determined by the action in the US equity markets. In order to get back into a positive demand posture, the energy complex will need good US numbers and positive equity market action, or we suspect that this week's high of $84.64 will serve to cap off rallies. In fact, the failure to hold above $83.31 in the first hours of trade today could undermine sentiment and reduce the prospect of a demand led rally. Internal fundamentals in oil are slightly negative and without a distraction from that view early today, the bear camp might prevail.

Natural Gas:
June natural gas was able to rally sharply yesterday off of a lower-than-expected build in EIA storage, but the total inventory amount is still close to a record high for this time of the year and therefore the rally might have been partly the result of spread action with the crude oil market. The improvement in sentiment created by a stronger US equity market this morning should see gas prices remain well above the recent lows, but the underlying sentiment for this market needs to turn around aggressively before we see prices exit their recent trading range on the upside. However, seeing the July Natural gas contract manage a rise above the $4.25 level could be cause for additional short covering buying, as the last COT report, adjusted to the recent lows, might have put the net spec short positioning above 80,000 contracts. The weekly EIA natural gas storage report showed an injection of 73 bcf. Total EIA storage stands at 1829 bcf, or 18.5% above the 5 year average. Over the last four weeks EIA natural gas storage has increased 203 bcf.

Cattle:
The demand news was very strong this week, with a jump in weekly export sales and declining cold storage stocks. Traders also believe that imports are slow, and this should help keep US supply relatively tight. There are some concerns that too many cattle will move onto feedlots in March and April and cause an increase in supply into the summer. June cattle experienced an early setback yesterday due to weakness in the stock market and a strong US dollar, but support held above Wednesday's lows and the market closed slightly higher on the session with another new contract high close. Weekly U.S. beef export sales came in at 20,300 metric tonnes, compared with the prior 4-week average of 10,325. This is the highest weekly sales total since August 2008. Cumulative sales for 2010 have reached 228,600 metric tonnes, up 30% from last year's pace. The monthly cold storage report, released after the close, showed frozen beef stocks at the end of March at 390.5 million pounds, which is down 8% from last year and down from 404.5 million pounds in February. Cash cattle in the Southern Plains traded at $99.00, down $1.00 from the highs last week and up $1.00 from the lows last week. The estimated cattle slaughter came in at 126,000 head yesterday. This brings the total for the week so far to 507,000 head, up from 499,000 last week at this time and up from 504,000 a year ago. Boxed beef cutout values were down 9 cents at mid-session yesterday and closed 27 cents lower at $167.35. This was up from $166.96 the prior week. Average dressed steer weights for the week ending April 10th came in at 814 pounds, up from 813 pounds the previous week but still down from 835 pounds last year at this time. Beef production for the same week came in at 468.8 million pounds, up 0.80% over a year ago. Traders see this afternoon's Cattle on Feed report showing placements at 3-11% above last year, with many estimates centering around a 6-7% jump. However, marketings are also expected to be active at 4-6% above last year. As a result, on-Feed supply as of April 1st is thought to be 1.5% to 3.5% down from last year, with most estimates near a 3% drop. There are still no deliveries against the April contract.

IWM Fill

Filled for 0.30 Debit

Rut Update

Well we got a break for a few days but the market is now back at it.  Rut made new highs yesterday and the futures are pointing to a higher open this morning.  So we are going to start working 2 new orders.  1st we need to try and open a new put spread.

Sell 3 May 660/650 put spread @ GTC limit 0.50 Credit


Then we need to buy and IWM debit spread to protect our up side.

Buy May 75/76 call spread 3/3 @ 0.28 - 0.30 Debit.  (Price might need to be worked to get filled.)


I will post all fill updates, and get the tracker sorted today.