S&P 500 held up reasonably well Friday as it took many hours to break low 4,280s. Not that Mideast news would be providing relief – and sectoral view had been consistently deteriorating during the day, allowing me to make not only swing trading shorts, but also intraday ES and DAX short calls to benefit clients. I also did call for the 200-day moving average break, and for this downswing not to be over. We ended the week on a bright note, and unlike the preceding one, the excessive bearish positioning on Mideast isn‘t there now (possibly on account of diplomatic efforts and Israel‘s hesitancy to start ground offensive) – meaning it could materialize on actual developments, and add to selling pressure next week. I simply view the start of a relief rally as too soon – apart from a possible bullish gap, not likely to happen within a couple of hours of Globex open on Sunday.
Let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article contains 5 of them.
S&P 500 and Nasdaq Outlook
Bears confirmed the initiative following 4,330 break, and not even 4,278 was able to stop the selling – my Friday‘s article thoughts were confirmed. 4,260 also gave, proving the bears‘ strength. Contact with 200-day moving average isn‘t the reason to buy – conversely in this case, I would be expecting selling into strength when it comes to upcoming GOOG and MSFT earnings.
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Copper
Copper is acting weak, and that has to do with the real economy on track to enter recession no earlier than 3 months from today. Prospects for acceleration are faltering for 2024, and hard landing is unavoidable.