Yesterday, U.S. stock markets continued to fall as the first-of-the-month rebalancing exerted pressure on the markets. This was particularly true of the Nasdaq, which fell hard early and never had a strong bounce, as illustrated on the chart.
Overnight, Asian stock markets closed moderately lower, and this morning, Europe is modestly lower across the board.
The economic calendar is busy this morning in the U.S. While we do not anticipate any reports causing a market move, several items shown below are worth paying attention to, include Jobless Claims and the EIA Natural Gas and Petroleum Status Reports.
As we head into today’s trade, we maintain our view from yesterday to trade smaller and look for opportunities on both sides of the market. However, we believe that a rally is coming. If that doesn’t come today, then we believe the reaction to tomorrow’s Nonfarm Payrolls will result in higher prices.
We are keeping an eye on both lower and higher targets in the S&P 500 futures. To the upside, we are watching the 2893 to 2895 area for resistance. If bulls can take this area, then the target will be the next resistance area, which is 2900, followed by 2911.
To the downside, 2886 to 2885 is a pivot area. If the ESU18 breaks below that range, then we would look for price to head for the overnight low of the 2882 area, which would be followed by yesterday’s low around 2877, and then possibly 2865.00.
The calendar is quiet in the two opening sessions of next week. Conditions will be favorable for a bounce, but we remain cautious while still recognizing that buying the dips has been the path of less resistance. However, we will not be trying to catch falling knives; therefore, we will buy when momentum is strongly lower. Given the seasonality, it is not out of the realm of possibility for a major down day to be on the horizon. When we do buy, we will look for a rally and then attempt to buy a re-test.
Today’s Economic Calendar:
- Weekly Bill Settlement
- Challenger Job-Cut Report 7:30 AM ET
- ADP Employment Report 8:15 AM ET
- Jobless Claims 8:30 AM ET
- Productivity and Costs 8:30 AM ET
- PMI Services Index 9:45 AM ET
- John Williams Speaks 10:00 AM ET
- Factory Orders 10:00 AM ET
- ISM Non-Mfg Index 10:00 AM ET
- EIA Natural Gas Report 10:30 AM ET
- EIA Petroleum Status Report 11:00 AM ET
- 3-Month Bill Announcement 11:00 AM ET
- 6-Month Bill Announcement 11:00 AM ET
- 52-Week Bill Announcement 11:00 AM ET
- 3-Yr Note Announcement 11:00 AM ET
- 10-Yr Note Announcement 11:00 AM ET
- 30-Yr Bond Announcement 11:00 AM ET
- Fed Balance Sheet 4:30 PM ET
- Money Supply 4:30 PM ET
Tomorrow’s Economic Calendar:
- Robert Kaplan Speaks
- Employment Situation 8:30 AM ET
- Eric Rosengren Speaks 8:30 AM ET
- Loretta Mester Speaks 9:00 AM ET
- Quarterly Services Survey 10:00 AM ET
- Eric Rosengren speaks on Saturday 10:45 AM ET
- Baker-Hughes Rig Count 1:00 PM ET
- Treasury STRIPS 3:00 PM ET
Monday’s Economic Calendar
- 4-Week Bill Announcement 11:00 AM ET
- Raphael Bostic Speaks 11:30 AM ET
- 3-Month Bill Auction 11:30 AM ET
- 6-Month Bill Auction 11:30 AM ET
- TD Ameritrade IMX 12:30 PM ET
- Consumer Credit 3:00 PM ET
Tuesday’s Economic Calendar:
- NFIB Small Business Optimism Index 6:00 AM ET
- Redbook 8:55 AM ET
- JOLTS 10:00 AM ET
- Wholesale Trade 10:00 AM ET
- 4-Week Bill Auction 11:30 AM ET
- 52-Week Bill Auction 11:30 AM ET
- 3-Yr Note Auction 1:00 PM ET