Equity Daily Eur Open

August 20, 2013

SPX:

TECHNICAL:

Our model is still Short. Our Model shows there is still further significant downside possible.

FUNDAMENTAL:

Our Model is Short today. FOMC Minutes are Wed and the mode is Sell Fixed Income Sell Equities. There is no reason to see any change to this theme.

SUMMARY:

Our combined model is Short.  

Macro Theme:

Clearly the market will lean towards being SHORT the 10's knowing that the BIG TAPER is just months away. Remember the TAPER is new just as TARP was 5 years ago. Bonds caught a bid and stayed bid and since the Taper talk bonds have been largely offered and stayed that way and likely will. FED Talk is of course down playing the impact but for now the Macro Trend is clear - SHORT BIAS

DAX:

TECHNICAL:

Our Model Neutral Today. There are mixed indicator inputs stemming from the recent continued gapping moves in the DAX, however, there is starting build a slight Long bias.

FUNDAMENTAL:

Our Model is Short Today. The continued Fed Taper Talk is ruling the show and with with Hawkish like comments out of the Bundesbank and rising Sovereign Financial costs it is looking difficult to see any reason for a move higher

SUMMARY:

Our model is Neutral. The technical Model is Neutral and almost wanting to turn long, however, the Fundamental Model is short. With equal weight given to both Models today we are Neutral.

Macro Theme:

The ECB is out of tools. Their situation is precarious as recent data has bottomed out but not strong enough to turn the European recession around which means all they can do IS TALK DOWN RATES but TAKE NO ACTION!