This is a guest post from Precision Capital Management

The Precise Take – Overnight, equities recover from Friday’s selloff on weaker US Dollar

Leaders Analysis:   The EuroYen forex cross is now using previous resistance (50 day moving average) as support, and has exceeded last week’s high overnight.  Commodities, in general, are up overnight as well on a weaker US Dollar.  Accordingly, the leaders are still equities bullish.

Medium Term Analysis:  Despite the selloff on Thursday’s close, after the highest volume level for the ES (red histogram below) was reached, the ES was bought aggressively.  After today there is not much news until Friday’s Unemployment Situation.  Bullish seasonality and the leaders suggest at least a retest of the ~1125 area; however, longs will need to prove they are in control by closing over the weekly pivot of 1116.25.

Trading Today:  ISM at 10:00 am is the major news item of the day, and the day’s direction (if one develops) will likely be determined thereafter.  Until then, we play the projected range and, perhaps, thereafter, depending upon…

Read the full report:

http://www.precisioncapmgt.com/wp-content/uploads/Precision_Report_January_4_10.pdf