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U.S. equity index futures ~flat
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Euro STOXX 600 index ~flat
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Dollar edges down; gold ~flat; crude lower; bitcoin rises
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U.S. 10-Year Treasury yield falls to ~3.53%
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S&P 500 INDEX: STILL LOST IN THE CLOUDS (0900 EDT/1300 GMT)
The S&P 500 index continues to probe some major chart
barriers. And last week's 0.1% dip provided little clarity for
traders as they remain focused on one big billowy cloud on the
horizon.
The SPX hit a high last Tuesday of 4,169.48 before closing
out the week at 4,133.52. Thus, the benchmark index continued to
flirt with the upper edge of the weekly Ichimoku cloud, which
resides around 4,155:
Ichimoku cloud is technical indicator which displays support
and resistance, identifies trends, and measures momentum.
Utilizing midpoints of ranges, a number of lines are generated.
Two of these lines are used to create cloud boundaries. The
entire cloud is shifted forward in time in order to provide a
glimpse of future support and resistance.
Once the SPX broke below the cloud in May of last year, it
has failed to reclaim on a weekly closing basis. Indeed, rallies
failed in early-June, mid-August, mid-December, and in
early-February of this year.
Thus, the 4,155 level marks a key hurdle.
Add in additional resistance at the early-February high at
4,195.44, the 23.6% Fibonacci retracement of the March
2020-January 2022 advance at 4,198.70, the Fed-Chair Powell
August-26 Jackson Hole speech high at 4,203.04, and the 100-week
moving average, which ended Friday at 4,203.27, and bulls may
have their heads in the clouds if they expect the SPX will be
able to continue to advance.
That said, clearing these barriers will have the potential
to add credence to the view that the SPX saw a major low in
October, and suggest that its trend inflection is only
strengthening.
A sharp break to the downside can put the lower cloud base,
which is now around 3,850, as well as the 38.2% Fibonacci
retracement of the March 2020-January 2022 advance at 3,815.20,
and the March trough at 3,808.86, at risk.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
