SPX Futures are Weak but no Sell Signal, Yet
Stock-Markets / Stock Market 2017 Mar 31, 2017 - 04:12 PM GMT
Good Morning!
SPX futures challenged mid-Cycle support at 2362.84 in the overnight session, but have bounced back above it as I write. We await the breakdown beneath that level followed by the Lip of the Cup with Handle at 2356.00 and the Broadening Wedge trendline at 2350.00.
ZeroHedge writes, “Stocks fell worldwide on the last day of the quarter, with US equity futures pointing to a lower open even as the S&P is set for its best quarter since 2015 amid persistent economic and political uncertainty.
WTI held gain above $50 a barrel, capping the biggest weekly gain of 2017 while the rand fell after South Africa’s finance minister was fired. European government bonds and Treasuries were steady with gold. Another three Fed presidents are set to speak on Friday; today's economic data in the US includes University of Michigan consumer sentiment, as well as personal income and spending.”
With GDP growth at stall speed, corporate earnings cannot grow. Wolf Richter reports, “And corporate profits, despite a stock market that has been surging for years, are even worse. A lot worse. They’ve declined for years. In fact, they declined for years during the prior two stock market bubbles, the dotcom bubble and the pre-Financial-Crisis bubble. Both ended in crashes.”
VIX futures are flat this morning, so there is no directionality here. At least, not yet.
The USD is weaker this morning. It has made a 50% retracement in the overnight session and appears to have begun to reverse down. It is difficult to say whether this is the entirety of the retracement.
The cycles Model suggests a probable low next week, followed by a potential period of strength through mid-April. The next Master Cycle low is due in early May.
Regards,
Tony
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