U.S. equity indices are tanking this morning after digesting that Obama will be at the helm for another four years. The fiscal cliff looms, as well as many outspoken corporate CEO’s indicating displeasure with another Obama presidency, as they feel it will be bad for the business climate and growth prospects.
The DEC12 E-mini S&P 500 is down more than 30 points at just above -2%. Not a pretty sight. Oil has swiftly reversed course from yesterday’s short covering rally, and is trading down more than $3 this morning. Our next downside target is $82, as we have been noting for a while now.
The US 30YR bond (DEC12) has exploded in price this morning, up almost 2 full points, which translates to around +1.3%. Investors seem to think that the policies of easy money and low rates will continue under Obama, and also likely are looking forward to more uncertainty with Greece and Europe, thus all this combines for a big bond rally today.
We see the 30YR bond bounced hard off of a support level at 147-16, and our next upside target is 152, with our pivot level at 150-08.
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