The XJO is expected to edge higher on open this morning following a strong night in the U.S. Most of their rally overnight was a reversal in Tech, with their Financials and Materials mildly red. U.S futures are flat.
It was not surprising to see a rebound overnight, but our market will largely ignore it this morning as they did the falls in the session prior. Yesterday we pulled back to test 8,400 again in a meek showing, and this morning we should bounce from it one again with an expected open near 8,430. This also roughly represents the highs over the past three sessions, marking a tight consolidation as we observe from the outside the volatility in the U.S.
Roughly 8,450 and 8,350 represent the recent highs and lows, and are the first targets with any normal movement. We should expect to test and possibly break either side in the coming days. We have local CPI data today, and a Fed interest rate decision tonight which seem quite likely to move markets. Which way, however, is hard to predict.
US Markets
US shares rebounded fairly strongly overnight, with technology stocks leading the charge after selling-off in the prior session. Despite this, most other sectors closed lower, with non-tech sectors falling with mixed economic data and with prices looking expensive. Overnight, economic data showed fewer durable goods orders and a decline in consumer confidence. The main event for this week will be Tonight’s Fed meeting, with the Fed expected to keep rates unchanged. Its hard to know what the response from the market will be, but it will likely come down to how quickly the Fed thinks they will resume cutting rates – if they indicate a prolonged pause, we could see selling resume.
Technically, The SP500 bounced off the 6,000 point level and now looks bullish to the all-time high at 6,100. Should the index break through this level, it would indicate further gains. A continued hold of this level could proceed a period of selling.
Only three of the eleven sector groups of the SP500 closed higher overnight, with Technology the strongest performer, while Communications also fared well. Real Estate, Utilities, and Staples saw the most selling.
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