We’re seeing mild gains in the US and European equity markets following two key US economic reports: ADP data coming in 237k and GDP at 3.0%.
The key for last 24 hours revolves around the late day reversal in US Equities and the makings of a bear trap. The S&P 500 (NYSEARCA:SPY) is pointing higher early in the day but it remains to be seen if the bulls can squeeze the bears.
It’s worth pointing out that we’ve managed to avoid selling off for now, despite all the geopoltical strife, Economic fears revolving around the hurricane, or DC Drama. This is a relative positive for market.
The price action in both the Technology Sector (NYSEARCA:XLK) and Industrials Sector (NYSEARCA:XLI) is constructive. That said, Financials have weakened a bit and still need to show some strength in the days ahead to breathe life into a larger rally and move higher.
Market breadth remains subdued and momentum has waned. That said, we’ll focus on price in the coming days to see if the market is setting up for a move higher… or if it is running out of gas.
Either way, it’s key to note that trends have turned a bit less negative in the short run as a result of yesterday’s reversal. Here’s 3 charts that illustrate what’s happening from a macro trading level in the equities markets.
S&P 500 Futures “Daily” Chart – Still in no man’s land, but a move above 2455 on a closing basis would help prices extend higher yet.
Bloomberg World Index – The world index held where it needed to in mid-August. The resulting rally attempt has been very shaky to say the least, but for now, everything is still intact.
MSH Morgan Stanley Technology Index – Tech holds the key for the market. An upside breakout is looking increasingly more likely and this would be a positive near-term. Would also be positive for the Nasdaq and Technology Sector ETF (XLK).
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
