S&P Lacks Direction

January 24, 2017 5:57AM CST

Global equity markets were higher across the board, in a move that was largely characterized as a relief bounce, following political news from the prior trading session.  We suspect the global equities derived some fresh investment interest from a flurry of favorable international scheduled economic dates overnight.  With a three-year high in German manufacturing PMI figures overnight, the slight contraction in overall euro-zone PMI readings is discounted.  The equity markets were probably held back slightly by news of an accounting scandal at the European arm of BT Group plc. The markets were also undermined off of news that Phillips missed their 4 th quarter forecast due to a positive psychology in an environment, which might continue to be uncertain until the new administration completes its initial salvo of executive orders.  As suggested already, the E-mini S&P continues to lack definitive direction as it waffles within a range defined as 2272.75 and 2251.75.  Some might even suggest that the pattern since January 6 th is a slow erosion of prices which in turn, mirrors a slow deterioration of optimism toward 2017.  On the other hand, we do think the 2250 level is a fairly solid value/support zone. But to leave behind the last 40 days consolidation to the upside probably requires specifics on a tax reform, and evidence that infrastructure spending efforts are getting underway and will be supported by both parties.  2271 is upside resistance and 2252 is support.

Emini Daily

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