Economic Reports Due out (Times are EST): Consumer Credit (3pm)
Premarket Update (Updated 8:00am eastern):
- US futures are slightly down ahead of the open and has recovered significantly off of the overnight lows.
- Asian markets are taking a heavy hit, down on average 2.7%.
- European markets are trading in a wide range – down as low as -1.9% and as high as +0.1%.
Technical Outlook (S&P):
The S&P saw a significant sell-off yesterday, for the third straight day on Friday. Significant support in the short-term is being tested at 1368 We have seen a substantial amount of weakness in the futures session that began on Sunday night (as much as 17 points down on the S&P at one point), but has managed to erase most of the weakness. S&P is back to short-term oversold territory today. We tend to get bounces in the market rather quickly in this area. Triangle pattern has formed on the S&P with a series of higher-lows a and lower-highs (see below chart). The S&P experienced an increased amount of selling Friday, and is back inside of the 1392/1357 price range, which muddles the market outlooks some. Possibility of the market breaking through the lower channel today. There is a short-term slight uptrend in place off of the 3/6 lows with support today at 1368. The S&P is now trading below the 10-day, 20-day and 50-day moving averages. Head and shoulders pattern we outlined the past few sessions on the 30-minute chart hit its target prices and worked out perfectly. The market’s whip-saw action of late has created a convergence of moving averages (10, 20 & 50 DMA’s). 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.
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