S&P Futures Struggle with 1200
Tuesday, April 13th, 2010Tuesday, April 13, 2010
The S&P futures are pulling back after their first 1200 test. Seeing as how much of a battle 1100 was, it wouldn’t be surprising to witness a similar pattern around 1200 even if there is a near-term breakout. U.S. equities are trading lower after Alcoa kicked off the earnings season by missing estimates, setting a bleak tone for the beginning of the season. Attention now shifts to Intel and tomorrow’s key Retail Sales and CPI data releases. Today’s Trade Balance figures show that imports outpaced exports and grew at a rate faster than anticipated. Hence, tomorrow’s Retail Sales data could come in strong considering the solid imports data. Investors will also be paying close attention to CPI since an increase in prices could lead investors to speculate that the Fed will raise sooner than anticipated, whereas stagnant prices would support the central bank’s loose monetary policy, an equity positive. Hence, should Retail Sales happen to miss and prices rise this could place downward pressure on equities and lead investors towards the Dollar. Speaking of FX, currency markets are cooling a bit and we are witnessing risk averse money flows. However, this weakness could prove to be healthy considering yesterday’s breakout in the Euro, Cable and Aussie. With investor uncertainty regarding Greece cooling investors may be able to shift their focus towards economic fundamentals and earnings. However, there remains the potential for a psychological flare, so investor should keep an eye on the news wire as well.
Technically speaking, the S&P futures face topside technical barriers in the form of intraday highs and the psychological 1200 level. As for the downside, the S&P futures have multiple uptrend lines serving as technical cushions along intraday and previous April lows. Additionally, the psychological 1175 level could continue to serve as a solid technical cushion over the near-term.
Price: 1186.50
Resistances: 1188.21, 1190.14, 1191.72, 1194.17, 1197.15
Supports: 1185.05, 1182.77, 1181.36, 1179.96, 1177.68
Psychological: 2010 highs, 1175, 1200
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