Today we can see the S&P shoot higher. Two big retailers report earnings and we get home price and consumer confidence data. Traders will be watching these numbers to determine whether to start buying heavily to propel the index higher.
The S&P 500 jumped higher yesterday above 1,850. This was a rather surprising rally that saw the index touch a new intraday record at 1,858. In the final hour, stocks retreated and finished at 1,847.61. This is just below the record close at 1,848 that was set on January 15.
The Recovery is Not Convincing Though
This late selloff was a message. We need a close above 1,850 and we came up short. This move could simply have been an extension of a correction higher. The Dow Jones also failed at a key resistance level before losing ground. The DJIA closed up 103 points near 16,207. We saw an intraday high at 16,588. A close above 16,250 would have been a good sign. This leaves us cautious. Investors (technical traders), bears and bulls, were not happy with the way the markets closed. This could be the new normal right now where recoveries do not see follow through and neither do moves lower. There is simply not enough movement higher to make the bulls happy even though we are close to the highs for the year.
There is a lot of things that can stick here. We have seen nothing really decisive emerge. Right now we are in the midst of a correction that is similar to what we saw in 2013. Markets corrected five to seven percent and really did not go anywhere after that.
Corporate Earnings and Economic Data in Focus
We get a whole slew of corporate retailers reporting earnings today. Home Depot (NYSE: HD) and Macy’s (NYSE: M) will be closely watched to see if the weather impacted them. Other companies like Sanderson Farms, Domino’s Pizza and FirstEnergy also report today.
As far as data today, we get the S&P/Case Shiller and the FHFA home price reports at 0900 EST. Consumer confidence comes out at 10 am. Investors will watch home prices for any continued signs of weather related weakness. There are also concerns the softness in the housing market is also fundamental.
Right now, bottom line, there is not enough convincing buying to indicate a huge rally in the S&P 500. Caution is advised right now as we could get another dip lower before a full out recovery.
Market Watch Video: What’s Happening Today
Binary Option’s Take For The Day
Equities are in play today. The S&P and Dow are both near highs for the year but structure is not convincing. In the Forex market, the yen continues to crawl higher.