10 year Italian bonds now trading at 7.34%. The 3-10 year yield curve on Italian bonds is now inverted. Inverted yield curves almost always precede recessions. Contagion now has Spanish yields trading almost as high as 6%. Money has moved into the US dollar and US treasuries as their safe-haven status continues to be applied. Futures are gapping down significantly this morning.
Amidst this negativity though, it looks like a nice buying opportunity is presenting itself. I like long entries in the 1238-1240 price area on the ES. Be careful defending any longs if price goes below 1236 ES.
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I am long now at 1239.50 ES
ReplyDeleteLooking to sell this long position somewhere in the 1255-1263 price range. From there I will be looking to flip and get short with first target at 1222-1223 and second target in the lower 1180s ES.
ReplyDeleteES moved down to the first target at 1222 already and has since rebounded back up to the 1240s. Question now... When to get short? I expect a move down below 1200 next...
ReplyDeleteNow that ES touched 1264 this morning, it is a good place to get short. At the same time, I don't think there is much potential for any significant selling today ahead of the weekend.
ReplyDeleteI continue to believe ES will move down below 1200 before it gets above the previous high at 1274.