Both of yesterday’s quantitative levels were touched beginning with a minor sell-off to 1395 followed by an intraday reversal higher to 1410. The SPX managed to continue up to 1415 only to end the day below my 1410 Overbought level. Today’s Oversold / Overbought levels come in at 1398 / 1414.
With the futures lower on a slightly worse than expected German PMI and US ADP report, I suspect there is a strong possibility that we will touch that Oversold level of 1398 today. Capital markets are struggling over which data to follow–domestic or global. Although, the ADP report will help apply pressure to the downside on the SPX and has certainly dampened the mood for the upcoming Unemployment report on Friday.
I expect the SPX will remain lower throughout the day and finish in Oversold territory. The 10 Year Note is off to a strong start this morning; yield lower to 1.90%. This benchmark will continue to indicate the strength of the SPX rally–currently indicating that it is questionable. The sideways-to-slightly-negative action for equities is still in effect.