As we start a 4 day week in the markets we are on the verge of breaking down below critical support at the 800 level. It just seems like this market is posied to retest the November lows around 740. The futures Monday night are lower at 807 so we should see a gap down Tuesday.My bias to bearish and I think we could see those November lows retested this week if the market doesn't get going quick. We could see a retracement into the 820 area to fill the gap from Friday but if not then watch out below as there is very little support under the 790s. It think if we break 800 this week then we see the 767 level fast.
Economic data this week includes:
Tuesday- Empire St. Mfg., Net Long term TIC flows
Wednesday- Housing starts, Building Permits, Capacity Utilization, Industrial Production, FOMC Minutes
Thursday- PPI, Jobless Claims, Leading Indicators, Philly Fed
Friday- CPI
The one thing I will say about the markets is that it seems everyone is expecting this retest of the November lows so mayyybe it just might not happen. The market has a way of surprising you and when the herd is thinking one thing, the market will do another, so just a thought.
Overall, I think it could be an ugly week in the equities with plenty of shorting opportunities. The gold market looks to continue its rally of late and the dollar as well. Trade safe.
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