Futures are active this morning, especially Brent Crude Oil (from the North Sea) and West Texas Intermediate Crude (WTIC). The March E-mini S&P Future (ESH11) is at 1,295.75 (-0.75%) and pierced through the uptrend line from August. It could test 1,200 (April 2010 support) if a breakdown is confirmed. Tom DeMark mentioned that level on CNBC on Tuesday.
The April Brent Crude contract was very volatile this morning. It hit a high of $119.79 before pulling back to $113.92. Was it a blow off top? We'll see. April WTIC is currently trading at $100.37 after hitting a high of $103.41. Look at the relationship between the 30 Year Treasury Bond Future (USH11), U.S. Dollar Index Future (DXH11), E-Mini S&P Future (ESH11) and WTIC Crude Oil Future (CLJ11) during the past 2 weeks. Traders bought Crude and T-Bond futures and sold the S&P and US Dollar Index futures. This was during the unrest in North Africa, so it makes sense if this was a flight to safety and oil output trade (Oil/USD and Treasuries). Higher oil prices could also affect the economy, so watch to see if these correlations change. Update: According to Zero Hedge Chinese oil facilities were attacked in Libya. See the charts after the jump.
March E-Mini S&P 500 S&P Future - Courtesy OptionsXpress
April Brent Crude Oil Future - Courtesy OptionsXpress
April West Texas Intermediate Crude Oil Futre - Courtesy OptionsXpress
March US Dollar/March E-mini S&P/April 30y Treasury Bond/April Oil