Saturday, July 31, 2010

Stock Market -- Position Overview

Our previous newsletter, dated May 26th, stated that the DOW appears to have entered a period of broad consolidation from an overbought situation, which could produce a larger trading range during the course of the month, between 9,800 and 11,200. The actual result saw an expanding trading range for all of the major indices, with the DOW moving between 9,774 and 11,177.

The US treasuries were anticipated to be price-supported, inversely causing yields to decline, with a projected peak-yield for the US 10-year Note at 3.60% or lower. The actual result did see the US treasuries rallied in price, as a global safe-heaven, when the stock market came under pressure, producing a US 10-year Note yield range for the month between 3.09% and 3.71%.

The US dollar was forecasted to rise in value, with a projected euro fx equivalent trading range for the month between $1.21 and $1.32. This proved to be the case, as global concerns caused investors to flock to the US dollar, producing an actual euro fx equivalent trading range between $1.2127 and $1.3202.