Inside Markets — SPX Resistance
Technical resistance for the SPX is the range-measured objective of 5099. We see that level holding at least until 10-year yields confirm a peak by closing below ~4.19%.
Technical resistance for the SPX is the range-measured objective of 5099. We see that level holding at least until 10-year yields confirm a peak by closing below ~4.19%.
Charles Dow developed ‘Dow Theory’ back in the late 1800s and it still works today – in one form or another.
Yesterday’s orderly decline in equity markets suggests the broad macro outlook remains relatively benign.
The hot CPI print means that markets will pay close attention to the week’s remaining inflation numbers, including PPI revisions (tomorrow), January import/export prices (Thursday) and January PPI/Michigan inflation expectations (Friday).
It’s a fairly quiet session as markets await tomorrow’s January US CPI print. US equities are mostly higher with the S&P 500 (SPX) pushing further above 5000.
The cyclically-sensitive Russell 2000 (RTY) has underperformed large-cap indices since the late-December rejection of technical resistance near 2050.
The SPX rally decelerates on the approach to 5000 with narrow leadership and early signs of bearish momentum divergence.
The S&P 500 (SPX) is approaching what could be a psychological resistance level at 5000, while the median sell-side strategy target for ’24 sits at 4950 (Bloomberg survey from mid-January).
Three months of a relatively benign macro backdrop has resulted in low equity volatility and higher valuations, though narrow leadership is cause for concern.
Friday’s Jobs Report was the fourth consecutive January where non-farm payrolls doubled consensus estimates.