META and Dip Buying

S&P 500 bears followed through during much of yesterday‘s session – and bonds broadly supported that downswing. Good META earnings completed the intraday reversal in the power hour, and that is to keep more than a lid on selling attempts today as we‘re getting AMZN earnings after the close – I expect the giant won‘t thow spanner into the stock market works.

S&P 500 buyers have former support of 4,115 in their sights, and odds are they would get there before any downswing continuation. Core PCE data proving elevated, not retreating inflation – in line with the view from other economies – is to be ignored for a while as much as unemployment claims not painting a disastrous recessionary picture. Either way, 25bp hike next week is all but guaranteed, and markets will have to face (the disappointment of the reality that) the Fed won‘t just relent and give in to rate cut demands. Stocks would though ignore that today.

More thoughts are covered in the individual chart sections, and that includes bond market perspectives.

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Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 and Nasdaq Outlook

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4,115 were broken as prices slid through 4,136 as a knife through hot butter. 4,078 got next in the crosshairs really fast, but the sellers weren‘t yet strong enough to break it (that power hour setback). This target has to wait for a fresh disappointment – one that isn‘t likely to come this week, would be a very safe assessment. Next week getting ready for FOMC and non-farm payrolls would through have much greater odds of accomplishing these objectives.

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