E-mini S&P, Nikkei, Oil Down After Tsunami Hits Japan, ZB Tipped Off ES Earlier (Treasuries/S&P)

E-mini March S&P (barchart.com)
Early Morning Update: Tsunamis striking Japan, a 'Day of Rage' planned in Saudi Arabia (non-event?) and sick looking charts (technicals) are putting pressure on markets worldwide. Japan's NIKKEI 225 Index closed at 10,254 today, -1.725%, and the March E-mini S&P future (ESH11) is currently at 1286.25, -0.62%. For information on the tsunamis read this post from a few hours ago. The March E-mini S&P future looks like it could test 1,200-1,225 when looking at the chart. The levels coincide with the April and November 2010 peaks. Click the chart to your left for a larger view.

Oil is getting killed this morning and I think the market likes that. April crude is down 2.91% at $99.72 and ES is now only down 0.19%. The second chart shows how T-Bonds predicted the S&P's correction (imo). Look how they rose in tandem in the beginning of February, but suddenly diverged when the S&P put in its blow off top, DeMark style (S&P went down/T-Bond went up).

Is it just me, or were Treasuries predicting a deflationary response from the oil spike. At that time (2/24/2011) there was political unrest in Egypt and Libya, so I'm thinking it was oil/dollar risk that made T-Bonds a more attractive safe haven. I have a forward looking question. What happens to interest rates if QE2 ends and/or the economy slips into recession. Soros and Pimco's Bill Gross think interest rates rise.


ZBH11 (Treasury Bond future) vs. ESH11 (S&P future)
Chart courtesy of Barchart.com (direct link)

NIKKEI 225 Index (NKY)

Chart courtesy of Bloomberg.com  (direct link)

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