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Crude futures are recovering from yesterday’s pullback which saw the futures testing the psychological $70/bbl level and our 2nd tier uptrend line. The futures are now battling with our 3rd tier uptrend line, which presently rests just below previous June highs. Crude is reacting positively to the better than expected economic sentiment data from the EU. Economic data from the EU has been coming in mixed over the past month and a half, including last week’s light showing from industrial production.

Washington, June 17 : A new study by Australian researchers has shown that postures adopted by young babies born prematurely are a powerful indicator of their intelligence later in life.

According to researchers, observing these postures could identify individuals who should be monitored for signs of learning difficulties.

London, June 17 : A top Al-Qaeda commander and 9/11 mastermind, Khalid Sheikh Mohammed, has admitted that he had lied during his interrogation at Guantanamo Bay.

Mohammad said he made up stories to prevent the CIA from torturing him during his detention.

According to the transcripts of military tribunals, released as part of a Freedom of Information legal action by the American Civil Liberties Union (ACLU), Mohammad cooked up stories to save himself from `water-boarding', a form of simulated drowning.

The S&P futures did in fact break below our 1st tier uptrend line yesterday, proceeding to retest May highs and June lows in one swoop. Yesterday’s weak long-term purchases data sent up a red flag and only exacerbated investor fear that declining foreign interest in U. S. debt could compromise the economic recovery taking place due to higher governmental borrowing costs.

Gold continued to decline from its broken neckline yesterday with investors exiting equities and running towards the Dollar for cover. Gold continues to exercise its positive correlation with U. S. equities, and serves as a competent indicator for the S&P futures. Despite yesterday’s decline, losses were tempered as bulls came to the rescue at our critical 1st tier uptrend line.

The 1st tier uptrend line is important since it originates from 2008 lows and touches several lows along the way, including 11/13/08, 4/20/09, and 5/04/09. Therefore, any contraction below our 1st tier uptrend line could result in a relatively quick retest of the highly psychological 900 level.

The USD/JPY is selling off from our 3rd tier downtrend line after the currency pair failed to climb past previous June highs. Encouragingly, the pullback comes on declining volume while lacking the conviction to the downside like that of the EUR/USD. We are not surprised by the USD/JPY’s current weakness, and the tango between the near- term uptrend and medium-term downtrend lives to see another day.