Uncertainty Weighs on Stocks Early
Fundamentals
Index futures have been hanging around the 1400 level after falling from recent highs. The recent spate of bad earnings has planted seeds of doubt in the minds of many traders regarding the current state of the economy. Adding to this uncertainty was the major storm that hit the Northeast, which could account for billions of dollars of economic losses.Overnight news from China indicating manufacturing data there has picked up appears to have failed to inspire equity index traders in the US. Futures are lower ahead of today’s economic data.
Many traders are lacking confidence that today’s employment, manufacturing and consumer confidence data will show much improvement. Consumer confidence may rise slightly,and there may be an uptick in construction spending.Tomorrow’s economic data is highlighted by the Non-Farm Payroll (“NFP”) report. Given the fact that this is the last NFP number ahead of the election, the conspiracy theorists out there may discount a good number as window dressing.
Technical Notes
Turning to the chart, we see the December E-mini S&P forming a textbook triple-top pattern. After confirming the pattern, the contract consolidated just above the 1400 mark. It is not at all unusual for a contract to consolidate after confirming a reversal pattern on the chart. In fact, it could be seen as the norm, with double/triple-tops/bottoms as well as head-and-shoulder formations. A downward breakout from the consolidation pattern could offer further bearish confirmation for the market. The downward cross of the 20 and 50-day moving averages can likely also be seen as bearish.
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