Equities: The March E-mini SP 500(CME:ESH14) is up 12 points to 1745, after hitting one of our very significant support levels at 1735 yesterday. The 1725-1735 region is very supportive for this market. Key events this week could add some more volatility, especially Friday’s jobs report. Overall, if the jobs report is at or above expectations we could see a rally back up to 1775. We still see 2014 as a positive year for equities though there may be some short term adjusting to the taper schedule. Look for energy prices to have a large impact on consumers and the market. If oil prices can stay below $100, it could support equity prices.
Bonds: March U.S. 30-yeay bonds (CME:USH14)are down 19 ticks to 134’10, likely as an inverse reflection of positive SP 500 movement today. We now have a key resistance level for the bonds at 134’28. As always, the nonfarm payrolls report this Friday will have a huge impact. A lower than expected number would not shock us as cold weather may have slowed economic activity. This could drive stocks lower and bonds higher. If we get a big surprise to the upside, S&Ps could rally back to 1775.