Today’s Quantitative levels: 1373 (Overbought) / 1340 (Oversold). Yesterday’s price action was more foundation building in this mid-1300s (1330 – 1370) range. The SPX was severely Oversold on a short-term basis intraday and I added equities to certain portfolios.
Futures are rather flat this morning after coming off some gains earlier this morning. I thought that the momentum was behind equities and with European news somewhat behind us, equities would naturally move higher. The SPX is struggling to follow through. The opposite thesis may be the case; rather than equities falling on negative news, they were rising on the potential for unexpected, positive intervention. I’m not sold on the latter case and the SPX still has some time to prove the first scenario true. And it will have to do so in the face of a weak earnings season.
Quantitatively, the SPX is at a better entry point than it was yesterday, but Treasury yields fell materially and the price action is becoming less bullish.