Reply Hazy, Ask Again Later

posted Feb 9, 2015, 2:05 PM by Katie Shook   [ updated Feb 9, 2015, 2:05 PM ]
February 9, 2015

If you’re hoping for some kind of definitive “the market is going here” statement, you can stop reading now.  This week is another relatively light economic data week, so analysts will have that much more geopolitical news and ‘reports beneath the reports’ stories to shake things up.  We may see things like the JOLTS report take on unusual influence absent other material news releases this week.  Other than jobs and retail sales on Thursday, the calendar is pretty light.  This should keep Europe and oil in the spotlight.

What I’m expecting to see is a lot of volatility and a continued range-bound market.  What I’m not expecting is a catalyst that drives the SPX above 2100… at least not yet.  Last week’s move went right up to the resistance area and failed on Friday.  Overnight futures were down.  And the talk of a Grexit is lighting up my inbox (apparently it’s interesting, if not relevant).  So I’m looking for manufactured news this week and volatility to follow.

The database has strengthened significantly over the past few weeks.  At one point we were in the low 30% range for total long positions in the system.  Today that figure is just over 67%.  That’s a pretty good indicator the overall health of the market is improving.  Overall there haven’t been any major warning signs indicating the markets should cough up 20% of their value.  The issue has been that there’s not a significant justification for continued multiple expansion either.  Thus the stalemate of late.

The technical set-up for the week is little changed.  Look for a negative open today, with 2050 being the first area of consolidation.  Resistance for the week should be about 2079, with support running at the 100-day moving average around 2013 or so.  So somewhere in the 2020-2080 range should about do it.

Weekly Estimated Range

Weekly Estimated Range 2-9-15

Support and Resistance

Support and Resistance 2-9-15