It’s been over four months since the DJIA pushed up through its 200-day moving average. Aside from a couple of wobbles at that time, it has yet to backtest this important technical level.
It got close yesterday, and would probably have accomplished it this morning if not for CRM‘s 16% surge.
Once it happens, the other indices will need to make some quick decisions. SPX and COMP are both loitering on the wrong side of the 200-day tracks.
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Futures are off slightly this morning…
…perhaps in order to facilitate the Dow’s overdue backtest of its 200-day.
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Futures are holding a slim gain this morning with the assistance of both the EURUSD and USDJPY, which is just shy of our next upside target.
As discussed yesterday, central bank currency games have been instrumental in equities ability to break out of the year-long downtrend. Can they keep it up?
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Last week completed the backtests we’d been expecting, with ES, SPX, COMP, DJIA and NKD all holding important technical support.
While the fundamental picture might not justify these prices, the algos are satisfied. And, until price discovery reemerges (if it does), the algos are all that matter.
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Futures have dropped back through the 50-day moving average, putting the 200-day back in focus after yesterday’s near miss.
We’re essentially in the same situation as yesterday except that we’re jumping off from a much lower level.
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Futures are getting a boost from the old pre-open VIX dump this morning.
The question remains whether the various SMA200s are ready for a test.
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ES reached the very top end of our initial downside target yesterday, about 6 points above the 50-day moving average and 361.8 Fib extension. It tagged both overnight, leaving traders to wonder whether or not the 200-day is still in the picture.
There’s a very good chance that the release of FOMC minutes at 2pm ET will be the deciding factor.
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Futures are off sharply this morning, a common occurrence post-OPEX during a bear market.
Our price targets remain unchanged.
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Equities sold off sharply yesterday following a reminder that inflation hasn’t yet gone away. Between the MoM PPI print (0.7% vs 0.4% exp., 0.5% vs 0.3% core) and Fed presidents’ commentary, rates and the USD continued to rally – putting equities on the defensive.
The trend continues this morning, with futures off as much as 36 points overnight despite it being Feb options expiration day.
Meanwhile, the financial press has finally caught on to the notion that $1 trillion in credit card debt amidst rising rates and delinquencies might not be good for the economy. Will markets care?
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Futures are down modestly this morning as we approach options expiration Friday.
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