It’s a small dose, to be sure, but this morning’s Empire Fed Survey is a reminder that not all is well in the land of ever-increasing stock prices.
It’s adding to continuing Greece concerns and an unusual trifecta of faltering algo drivers. CL is in danger of losing the rising channel bottom (finally catching up to reality?)
USDJPY, while bouncing, is still under the influence of last week’s Kuroda buzz kill [see: Did Kuroda Just Kill the Bull Market?] after reaching our 125.72 target last week.
And, EURUSD is going the wrong way for all the right reasons (for a change.)
As for SPX, last week’s downside targets remain firmly in place, with the initial plunge certain to break the SMA100 (2087.96) yet again.
continued for members…
The initial test will be a .886 retrace of last weeks 2072 plunge — call it 2074ish — where it intersects the rising white channel bottom and the rising purple channel bottom. Should that hold, look for the usual strong bounce on CL/USDJPY.
If it doesn’t, our 2050 target starts to look better and better. Remember, it’s the pale blue .886 retrace from mid-March. Though the Jun 9 dip to 2072 sets up a potential .786 or .886 retracement. I prefer the .886 as it allows for an intersection of the SMA200.
UPDATE: 09:42 AM
SPX just tagged our next downside target, reaching 2074.26…
…before CL bounced back above the white channel bottom:
We have NAHB data coming out shortly, which is frequently optimistic and provides headlines bounces. An ideal bounce spot would be back to the SMA100 at 2088 or even the gray midline around 2092.
FWIW, ES reached its .886 with no problem, and its SMA200 has already reached its larger scale .886 at 2044.
But, remember, our goal remains lower as described above.
UPDATE: 10:00 AM
Cue the rally…headlines from Marketwatch…
Home-builder confidence rises to nine-month high in June
…and from CNBC:
Of course, reporting elevated homebuilder optimism is like reporting elevated optimism among 6-year olds on Christmas Eve. As one former homebuilder friend always tells me, “if I have money for lunch, I’m under-leveraged.”
I’ve updated the SPX chart with our bounce targets as described above.
As always, keep an eye on the Greece rumors out of the EU.
UPDATE: 11:12 AM
Tagging the SMA100…
