EQUITY DAILY

August 14, 2013

SPX:

TECHNICAL:

Our model remains mixed which suggests we are still well within technical Range Bound trading. We are still just a couple of down days from a full all out plunge.......

FUNDAMENTAL:

Taper Talk is two fold; there is mixed trading that results but then there is a positive surge that occurs on the back of good data. Equity markets are the last to react so until the FED officially announces the end of the world in Sept. equities will gyrate.

SUMMARY:

Tech & Fundmntl suggest Equities will be neutral to Long today.

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 was spot on yesterday and points to continued upside but there may be limited price resistance just ahead.

FUNDAMENTAL:

A Risk On sentiment if E-zone GDP's print strong should boost the DAX and Taper Talk goes to the rearview mirror.

SUMMARY:

Tech & Fundmntl suggest Equities will Outperform today.

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!