Monday, December 17, 2007

Dec 17 week outlook

Chart of March ES (SP500) futures Contract

Short term 3 month bill yields dipped last week, while the rest of the longer term bonds didn't follow to the downside as would be expected with another 25bp cut, meaning the interest rate cut was already weighted into bond futures going into the FOMC announcement. The yield on the 10 yr last week closed at 4.23%. I think Yields will be going down this week or stay flat. I've noticed as yields go down (bond futures up), you tend to see stocks go down as well.

Chart of March 10 yr bond futures contract

Overall, bullish on ZN, and bearish on ES. I could be totally wrong though, as some might see stocks a little "oversold" going into this week.


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