We have a very interesting market environment to say the least. There doesn’t seem to be a single day where the market gaps down and runs lower all day. Every day it seems the market finds a way to go higher, at least intraday. Most days it closes green. We had a move down this morning, but, as usual, it didn’t hold as the bulls came roaring back. They’re trying to get the S&P 500 to break out. This 2100 area has held it down for quite some time. It needs to blow through the 2111/2116 resistance zone so it can try to break out to new highs above 2134. The bears do fight harder every time we get near 2100, thus, in the bend we don’t really go anywhere special, although the moves lower off 2100 are getting smaller and smaller. That’s what really matters.
When a market is fighting resistance repeatedly, if you’re bullish, you want to see the indexes hold close to price, while unwinding overbought oscillators. That’s what we’re seeing now. The moves down off of 2100 are tiny as things do unwind, so the bulls look as if they’re getting ready to make the move they’ve waited for and haven’t gotten thus far. It’s been a long time, and that’s why the bull/bears spread went negative for a while. Frustration was the name of the game, and, on some level, it still is frustrating. Bulls started to turn agnostic and walk away from the game. They wanted to see what would happen. When nothing did the spread tanked. That’s actually good news if you’re a bull, so now we’re seeing the market try to lift off once again. It’s set up to do so, but the bulls have to plow through this 2100-2116 zone to, at least, back test the breakout at 2134. Things are getting very interesting now. It’s do or die time for the bears. They need to get very busy and to get busy now!
We had the much anticipated ISM Manufacturing Report thirty minutes in to the trading day today, and, thankfully for the bulls, it didn’t disappoint. Nothing to get excited about, but 51.3 was better than the 50.6 expected. The market started to pick up momentum once the number came out. That was likely due to the fact that the Chicago number yesterday came in under 50.0, which is not good for the economy. Shows contraction, thus, I believe it was a major relief to get this type of weak, but not below 50.0 number. The bulls as usual ran with it. Nothing spectacular, but better than the market had been prior to the announcement. A weak economy has no meaning to the market. It’s running up on low rates, thus, anything else is pretty much meaningless, unless, of course, things were really bad, and a number slightly above 50.0 is not a disaster. Not good, but not a disaster, and that’s all the market cares about these days.
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