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.
Wednesday, November 9, 2011
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