The S&P futures continue to march higher despite setbacks in econ data points, most notably yesterday’s discouraging New Home Sales figure. The slowdown in New Home Sales has negated this week’s positive Existing Home Sales data. In addition to yesterday’s negative housing number, the U.S. also reported disappointing Personal Spending and UoM data. However, investors shrugged off the setback and instead sent the S&P futures to new 2009 highs. The positive performance of U.S. equities likely resulted from the pullback in the Dollar following recent waves of strength. Meanwhile, investors will be looking forward to today’s weekly Unemployment Claims and Durable Goods Orders data releases. Should today’s data print better than yesterday’s, we could witness strength in the Dollar. On the other hand, more negative econ data could give investors an excuse to lock in more Dollar gains. The correlation between equities and the Dollar is a bite cloudy these days as it seems equities are benefitting no matter which way the Greenback moves. However, we believe a more reliable correlative pattern could come into effect once the holidays are over. That being said, activity should cool down as the trading session progresses as investors shut down for the Christmas holiday. Economic data will return on Tuesday with the release of CB Consumer Confidence.
Technically speaking, the S&P futures are still locked into their medium-term uptrend after setting consecutive higher lows while breaking out of previous 2009 highs. Furthermore, the futures have the highly psychological 1100 level serving as a technical cushion along with multiple uptrend lines should condition deteriorate. As for the topside, the S&P’s only foreseeable near-term technical barrier is previous 2009 highs.
Supports: 1116.25, 11114.5, 1111.75, 1108, 1106, 1102
Psychological: 1100, 1075, 2009 Highs and December Lows