Today, Tomorrow, and the Next

Today, S&P made its lowest close of the year at 1261.50. The selling was strongest in recent leaders, including steel, coal, ag, and oil stocks. The financials actually held up better than the overall market. Technology shares got hit hard, giving up all of yesterday’s gains. The market is trading inversely with oil prices, pretty much tick for tick. The market will not bounce until oil corrects, or at least stops making new highs every day.

• Tomorrow will be very interesting as we have the ECB rate decision at 7:45am and the jobs report at 8:30am.
  • The ECB is expected to raise rates. If they leave them unchanged, it should give the dollar a boost and put some pressure on oil.
• The market is known to rally into the July 4th holiday so consumers feel proud to be American and spend lots of money.
• SPX Support Levels
  • 1257 ~ lowest intraday price (March 17)
  • 1219
• SPX Resistance Levels
  • 1291 ~ recent resistance over the past week
  • 1315 ~ support from last week
  • 1327 ~ 61.8% Fibonacci Retracement
  • 1335 ~ support in previous range

Over the Next Week or Two

• StockTock believes that the overwhelming bearish sentiment is a ripe environment for a rally. We are calling for a bounce over the next few weeks.
• The long-term outlook is dependent on the price of oil. A continued move higher in oil prices is not priced into the markets.
• Technology shares have strong relative strength and should continue to outperform the S&P.

After That

• The market is at an important inflection point and the longer-term outlook is very uncertain.
• Credit market concerns have not gone away and high energy prices are a long-term issue for the economy.

The Market Outlook is updated each day as the charts fill out and provide more clarity.