(click to enlarge)Click to enlargeIn a holiday shortened week for the 4th July celebrations equity markets are now eying the forthcoming nfp data due for release on Thursday, and which now take centre stage. Today's major release was the monthly ISM manufacturing PMI data which came in marginally below forecast at 55.3, but nevertheless reflected a gently upwards trending set of data over the last few months. The current rally in equities continues to defy many market commentators, but which have surged higher today led, once again, by the NQ which is now approaching the key 3900 level. This is being followed closely by the YM which to date has been languishing in a congestion phase prior to today's breakout. The breakout has seen the September contract move over 100 points in the session so far. The YM too is approaching its own key level, which in this case is the resistance at the 16900 region where we saw two failures last month. This is now both a psychological and technical level, but if breached we should expect to see the YM (along with other major US indices) break out into new high ground. The VIX, of course, is heading in the opposite direction at much the same speed, and once the single figure price targets are met equity markets are likely to go higher still, on a wave of bullish complacency. For the time being as traders we just need to enjoy the ride.
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