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U.S. equity index futures decline: Nasdaq 100 off ~1%
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Euro STOXX 600 index off ~0.9%
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Dollar, gold up slightly; crude up ~1%; bitcoin off >2%
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U.S. 10-Year Treasury yield rises to ~3.63%
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S&P 500 INDEX: REST OR RELAPSE? (0900 EST/1400 GMT)
The S&P 500 index has backed away from some
significant resistance hurdles. It now remains to be seen if a
setback will prove to be just a pause in what is a new
bull-phase, or if weakness will soon re-intensify, leading to a
resumption of the prevailing bear trend:
Last week, the SPX hit a high of 4,195.44, rallying as much
as 20% off its October 13 intraday low. With this recovery, the
benchmark index recouped as much as 84% of its August-October
down-leg, and as much as 53% of all its bear-market losses on a
intraday basis.
However, the benchmark index failed to overwhelm the
4,198.70-4,203.04 area. This zone includes the 23.6% Fibonacci
retracement of the March 2020-January 2022 advance, now acting
as resistance, and the August 26 high, which was established the
day of the market's vicious downside reversal stoked by Fed
Chair Powell's especially hawkish speech at the Jackson Hole
Symposium.
The late-August reversal left an unfilled gap to 4,218.70 on
the charts.
With e-mini S&P 500 futures suggesting the SPX,
which ended at 4,136.48 on Friday, is poised to fall around 30
points early in Monday's session, a support shelf defined by
September-to-January highs in the 4,119.28-4,094.21 area can
come under fire.
Traders will be watching to see how the SPX behaves around
this zone. The January 30 low was at 4,015.55, and the support
line from the October low is now around 3,925.
Meanwhile, last Thursday, the SPX saw a golden cross,
suggesting the potential that bulls are arresting control of the
primary trend.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
