Monday 21 January 2008

Emini and Bond Market Valuation

In case you haven't heard, the Emini is down 60 points in limited trade on Monday. The close was 1,265.50 which suggests we might get an opening gap down on Tuesday of over 50 points. The last time this happened was after 9/11, shown below. Remember this will be shaking out volume and playing into the hands of the smart money.

Emini Opening Gap Image

Extreme Opening Gap Down: 9/11

John K. sent me an email asking about my bond market valuation comment here. With Bond markets rallying the Emini valuation against Bonds is very attractive now. The updated Bond market valuation chart is shown below. The over-valued areas are painted white and under-valued areas painted red.

Emini Bond Market Valuation Image