What a perfect timing today for pretty much what we anticipated in yesterday's post! While technical analysis helps to track what has happened in the past and where things are in the present, the only way to accurately identify what will happen in the future are the cycles. Without knowing about them it is difficult to predict how asset markets will trade. From yesterday's close at 2787, S&P futures tried to make one more push to get past the 2795 pivot by trading as high as 2798 but down trending cycles led to a reversal and from there S&P continued to decline reaching as low as 2764 (a drop by 34 points). At the lows, there was a RSI divergence setup in hourly charts leading to a rebound and futures closed at 2774. Cycles continue to show weakness for tomorrow and a close below 2762 on daily should bring some more downside.
From yesterday's cycle high of 1349.75, Gold dropped today to 1324 (a drop of 25 points) closing at 1328. Cycle continue to show more weakness for tomorrow. US Dollar futures gained today closing at 96.50. There should be more gains for dollar tomorrow.
On economic front:
- leading indicators continue to drop by -0.1% against a consensus of +0.1%.
- Durable goods order came at +1.2% primarily due to aircraft and vehicle orders, they rose only 0.1% excluding transportation. However, core capital goods dropped -0.7% (machinery, computers, communications equipment).
- While the composite PMI rose to 55.8 (due to rise in services level at 56.2), the manufacturing PMI dropped to 53.7.
- Jobless claims fell by -23K to 216K which was positive.
- Existing home sales fell by -8.5% y/y and -1.2% m/m in-spite of lower mortgage rates.