Treasuries fall from resistance; stocks look vulnerable

Treasuries have fallen from some key resistance and are now approaching pivotal supports. TYH (see chart) has 130-10.5 key closing pivot pt support. The Bund broke a short-term trendline support yesterday and dragged treasuries with it. If the Bund can climb back above 139.26 today look for some upside in treasuries as well.

USH failed at a key .786 resistance and is now approaching another .786 (support) of 142-06*. TY versus SP settled on its key support and could rebound from here so we need to be careful. Equity option expiration is today, and we may see some unwinding afterward…

FOMC meeting next week may give reason for some profit taking. A break back below 1307 in SPX could be the first signal for some downside pressure. XLF finally broke above its 200-day moving average, first time sine June 1 and it needs a settle above 14.07 for upside swing. XHB (homebuilders) put in a one tick high above 2011 top intraday, and existing home sales data today. XHB has risen 58% from October low (pg 3). XLE is back above its trendline (71.05) and we key this level for momentum.

UNG at $5 likely needs a reverse split soon. Still negative nat gas with 2.00 initial target. COG is a favorite short as it continues to hold below its 200 day avg.

Market Sentiment

CONTRACT / SECTOR

THEME POS / NEG

POSITION STAGE

TARGET / KEY PTS

STOCK INDICES US

Positive, but…

Stall for expiration

SPX 1307 key*

US TREASURIES

Mixed

30 yr failed at resist

TYH 130-10.5 close

CRUDE WTI/BRENT

Positive/Mixed

109.80 Brent key*

WTI 103.88 close*

METALS

At key resistance

Gold 1677* reverse

Copper 3.825 pivot

CURRENCIES

US $ Neg/Mixed

EURUSD 1.2981* s/t

AUD 1.0522* sell

GRAINS

Mixed/Positive

Soybeans 11.91 suppt

Long Corn H 5.95

David Wienke runs Triquetra Resources Ltd. in Riverside, Ill. (www.triquetraresources.com).

About the Author
David Wienke runs Triquetra Resources Ltd. in Riverside, Ill. (www.triquetraresources.com).
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