Investors are ignoring Friday's disappointing unemployment data and have sent the S&P futures well beyond our downtrend line. Hence, investors appear to be opting for the topside following Friday's erratic session. Today's topside breakout in equities further signifies the S&P's increasing reliance on the path of the Dollar. The Dollar is experiencing a broad-based selloff today after the G20 released a statement saying global central banks will maintain stimulus measures and historically loose monetary policies. The Dollar's downward trajectory is boosting the S&P futures higher sans noteworthy U.S. eocn data. Speaking of the Dollar, the GBP/USD has popped past all of our previous downtrend lines while the EUR/USD tests its highly psychological 1.50 level. Hence, investors should keep an eye on the EUR/USD since a breakout beyond 1.50 and October highs could help the S&P futures head towards their previous 2009 highs. In addition to the Greenback's weakness, we also notice that gold has broken through its psychological $1100/oz level. This is yet another key topside movement for gold, supportive of further weakness in the Dollar and consequently stronger U.S. equities.
Meanwhile, the U.S. will be relatively quiet on the data front following a busy week. Investors won't receive much from the U.S. until Thursday's weekly Unemployment Claims data. Hence, the S&P's immediate-term performance may become increasingly reliant upon movements in the Dollar. Since the U.S. will be taking a timeout from data, focus will shift to the Far East. China will be printing a wave of data late Tuesday EST, including Industrial Production, CPI, PPI, and Fixed Asset Investment. Any outperformance in China's econ data could help fuel a S&P retest of 1100.
Technically speaking, although the S&P futures have darted beyond our downtrend line, they still have to deal with previous 2009 highs and the psychological 1100 level. Therefore, a couple key topside technicals do remain before the S&P has the opportunity to experience a more protracted breakout. As for the downside, the S&P futures have multiple uptrend lines service as technical cushions now along with 11/06, 11/05, and 11/03 lows. Furthermore, the psychological 1050 level should service as a reliable support should it be tested.
Resistances: 1079.5, 1083.5, 1089, 1094.5, 1098.75
Supports: 1073.25, 1063, 1056.5, 1047.5, 1043.25
Psychological: 1100, 2009 Highs, 1050