Ahead of the open, (13-06)

f there’s any consolation to a 40 handle ES drop in a single day, it’s that a bounce oppy’ is on traders’ minds. Unfortunately for investors, today was just that, an opportunity for fast traders not investors.  Still, market did recover back to last Friday’s close and remains in the range band noted yesterday.

 

Today, we were back to the usual ES/ETF dominated trade of late.   Ahead of the open, noted SP prices closed marginally under 20MA and 1309 down-trendline. Although Spain yields hit record highs at ~6.80%, market prices didn’t get much lower (SP1307).  Considering no technical damage was done and selling didn’t pick up with fresh spike in Spanish yields, fast traders jumped in for a bounce trade as market seemed to turn a blind eye to Spain’s rising borrowing costs.

 

Note there wasn’t any new positive twist to yesterday’s negatives, just an over- reaction to ECB’s bi-annual report and the push for a ‘banking union’/deposit guarantee. This report supports what the market wants and what is often speculated, so it’s really nothing new.  All in, seems these dead cats keep bouncing, just happens the big cat JPM’ ’Dimon testifies tomorrow.  Maybe a little reprieve from Europe, yet a meaningless exercise at best.