Home > Uncategorized > 2012/03/02: Quick Post: Déjà Vu on March S&P 500 future dip toward 1,367

2012/03/02: Quick Post: Déjà Vu on March S&P 500 future dip toward 1,367

© 2012 ROHR International, Inc. All International rights reserved.

To quote the immortal Yogi Berra, “It’s déjà vu all over again” as March S&P 500 future dips toward 1,367 this morning. Now what? That is not just a question on whether the market is going to generally go up or down from present levels. March S&P 500 future 1,367 is the extreme trading high from last May. As the NASDAQ 100 and DJIA have already been above equivalent highs over the past couple of weeks, any convincing escape of the lead contract S&P 500 future would represent a more decisive indication of bullish momentum.

As noted once again (after repeated earlier discussion of it) in Tuesday’s TrendView BRIEF UPDATE (linked in Tuesday’s post) while previous violations of resistance indicated the next 15 points higher, much above 1,367 lead contract S&P 500 future would not have much resistance until the 1,400 area, and 1,430-1,440 above that.

And we are cutting directly to the technical trend chase today because we have reviewed all the heavy cross currents in the ‘bi-modal’ economic outlook and market influences in previous analyses and blog posts.

 

 

Also noted recently was the fact that the short term aggressive up channel trend support (from the mid-December selloff low) has worked its way up to just about 1,367 today. That is another reason for the compelling sense of déjà vu: that is the same channel the bears failed to shove the market back below two weeks ago in the vicinity of that key (post-US Employment number) gap higher that has not been closed.

Adding to the importance of the 1,367 area is the minor daily Area Gap higher yesterday, which left a low of 1,366.70 from Wednesday’s 1,364.40 Close. That might seem a very minor gap, and one of the nature that tends to get filled pretty quickly. Fair enough. However, those minor Area Gaps tend to also provide a bit of extra support. Along with the fact that the daily MA-9 is also right around the low end of that gap, that is ample reason to see where the short-term support is creating an additional focus for whether the short-term trend decides to remain UP in the context of what is a far more important intermediate-to-longer term trend decision area.

And that is in addition to the other short term technical indicators which also either provide support in that area, or are also stubbornly pointing to a potentially negative undertone… like the perversely stubborn negative DOWN signals in daily MACD’s.

Also reviewed in the opening of Tuesday’s TrendView BRIEF UPDATE (linked in Tuesday’s post) was the consideration of how the Private Sector Involvement (PSI) has become hypercritical to the resolution of Standard & Poors downgrade of Greece to ‘Selective Default’ on its sovereign debt (i.e., whether it will remove that designation, and quickly restore Greece to a non-default credit rating.) That becomes more critical into the end of next week, as the European governments that withheld the major portion of the Greek rescue funding are due to meet on March 9th (a week from Sunday) to sign off on the Greek debt rescue deal. They will not do so unless that PSI negotiation has been successfully completed. It’s going to be an interesting week next week.

 

General Market Observations and EXTENDED TREND IMPLICATIONS

The place where that does seem to have the most influence right now is in foreign exchange. That’s where the ‘macro-technical’ view of whether the equities enthusiasm is sustainable, or possibly just an irrational push back into the major “risk on” mentality, comes to the fore. As we noted at the top of the week the US Dollar Index failure back below (i.e. Negation of) its .7950 UP Break on the Fed’s recent endless liquidity indication was nearing lower interim support of some substance into.7800 area.

That was also consistent with reversal of the euro on a fresh EUR/USD 1.2925 UP Break out of its downward channel (from the major 1.4248 October high) pushing above its initial resistance at 1.3400-1.3360; and yet, as we have noted for some time, the major resistance remained 1.3460-1.3500. That also fit well with that US Dollar Index .7800 support.

And if all of this higher equity activity is indicative of so much economic improvement on the back of de facto central bank quantitative easing, why has EUR/USD failed so sharply from that resistance back below next support in the 1.3360 area? Of course, that’s in line with the US Dollar Index pushing up from .7800 to its next important resistance in the .7950 area once again. Even allowing that EUR/USD has interim support in the mid-1.3000 area, it is all a bit incongruous from the standpoint of the bullish equities narrative. We shall see.

Working against the equities rally representing a return to sustainable economic strength and a high degree of normalcy, the energy market has surged back up from below near-term support at April Crude Oil future to back above significant 102.00-103.39 range resistance (now key lower support.)

And even the major break in the April Gold future does not signify a major trend reversal to the downside in the crisis ‘haven’ currency (which is what the yellow metal ultimately represents.) So many recent UP Break’s, gaps, weekly moving averages and weekly MACD and the like all crystallize between 1,706 and 1,675, unless it breaks that support there is no indication it has actually turned DOWN for another more extensive selloff.

All of which only intensifies the decision in the equities that will likely have an influence on other asset classes as well. We refer you to yesterday’s post and the Current Rohr Technical Projections – Key Levels & Select Comments (based upon last Wednesday’s US Close) for additional projections and technical comments on what are now very psychological markets in foreign exchange, energy and gold as well as this looming next critical decision in equities.

Thanks for your interest.

 

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