Economic Reports Due out (Times are EST): Challenger Job-Cut Report (7:30am), Jobless Claims (8:30am), Productivity and Costs (8:30am), ISM Non-Manufacturing Index (10am), EIA Natural Gas Report (10:30am)
Premarket Update (Updated 8:30am eastern):
- US futures are slightly higher ahead of the open.
- Asian markets traded in a mixed fashion.
- European markets are trading 1.1% higher.
Technical Outlook (S&P):
Another day of consolidation for the markets yesterday. 1392/3 is holding up in textbook fashion. We also saw the market give up about 2/3’s of it losses to rally 8 points off of the lows of the day, closing only slightly down on the day. Good sign that the dip buyers are still around. Consolidation over last four days has brought us off of overbought levels. A well-received employment number tomorrow, and a descent amount of strength today could be enough to get the bulls back above the 1422 level. 10-day moving average crossed back above the 20, and 50-day moving averages. 1392 continues to represent support for the recent breakout. Break that price level, and conditions could start getting bearish again. 30-minute chart shows a healthy double bottom in place in the S&P and solid trend-line off of the 4/23 lows. The market’s whip-saw action of late has created a convergence of moving averages (10, 20 & 50 DMA’s). Not until we jet back and above 1422 will this market have resumed the rally back off of the October lows. Despite leaning bullish towards this market now, there still remains the possibility of the market forming a lower-high between current price and 1422. Friday’s continuation rally changed the character of the market to bullish by breaking out of the range the S&P had been trading in. Now the bulls need to make sure that any weakness that may come their way doesn’t cause them to fall back below 1392. The previous trend-line off of the October lows has become resistance for price action on the underside. On the weekly chart, we confirmed the bearish wedge pattern that we had been following for weeks. Very bearish development for the market.
My Opinions & Trades:
