Monday Will Be Key In Terms Of Bond Sales

 |  Includes: SPY
by: DeWayne Reeves

The E-Mini S&P 500 edged higher Friday on steps taken in the Eurozone to change the landscape of the elements that have stricken the Euro community with contagion fears. Greece had been the focus for quite some time as trust in leadership made it difficult to pass through the austerity measures to trim their budgets and increase revenue. Lucas Papademos has now been sworn in as Prime Minister of Greece with the hope that the funds necessary to prevent an economic collapse will be secured.

Italy has of course been the recent concern, with the bond sales registering about 7% which is hardly sustainable. Prime Minister Silvio Berlusconi is set to resign from his post the minute that the financial stability law has been passed in both houses of Parliament. Again, the Euro countries needed trust in leadership to take the debt ridden country through the debt crisis. It is thought that previous European commissioner Mario Monti will be perhaps filling the post as he is an international economist which may be helpful with the daunting task ahead.

The Italian bond yields have fallen in the wake of the restructured government in Italy. Monday will be key in terms of bond sales as the Italian debt sale is to auction $3 billion euros of the five-year government bonds. The results of this sale could steer the Euro FX and the indices as well. The Eurozone seems to desire in particular the investment aid of China. China in turn may be looking to get a favor for a favor as it desires the Yuan to partake in the IMF’s special drawing rights.

While we have no solution now or anytime soon, the actions of the Eurozone warrant some positive feedback as the market reflected Friday. Many brokerages are taking more of a bullish stance at least for the moment. The Thomson Reuter/University of Michigan Consumer Sentiment Report was up to 64.2, which is the highest since June. The US again is reflecting the moderate recovery which should increase in 2012. Commodity markets should soar next year and Hedge Fund interest may be back in vogue and investors may seek avenues that may produce some more aggressive and risky results.

On the stock side: Bank of America (NYSE:BAC) was up 3 % to $6.21. Citigroup (NYSE:C) was up 2.4% to $29.33. E*Trade Financial Corp. (NASDAQ:ETFC) was down 4.1% to $9.09. Caterpillar (NYSE:CAT) was up 4.3% to $96.13. Alcoa (NYSE:AA) was up 3.4% to $10.60. Walt Disney (NYSE:DIS) was up 6% to $36.70.

Monday, we have no major economic reports due out.

E-Mini S&P 500 Chart

Click to enlarge

Monday, what to expect: We are technically in sell mode on the Daily Chart unless it penetrates $1277.25. Monday, we anticipate an inside to higher day. Friday’s range was $1265.75 - $1233.75. The market settled at $1261.50. Our comfort zone or point of control for this market appears to be $1253.25. Our anticipated potential range for Monday’s trading could be $1282.50 - $1228.50.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I was actively trading the Euro and the US Futures Market on the Globex open Sunday evening.