The broad market has begun a strong rebound as we have continued to affirm over the past two weeks. While our support level of SPX 3,850 was broken intraday, it never failed to hold the market on a closing basis. SPX 4,300 is our minimum target for this rebound, with potential for extension to 4,500. We will know shortly whether this rebound is merely a bear market rally, or the final bottom of this recent decline. Gold members will be alerted shortly. Our big picture remains the same for this year with higher prices coming by the elections. However, time will tell whether this correction has already come to an end, or if one final drop to SPX 3,500 may be necessary to achieve true capitulation and turn the market’s overall trend back up.
From a technical perspective, the market showed a great deal of improvement as the Dow, S&P, and Nasdaq each recovered their 10-day moving averages. Although the major indexes are still trading beneath their 50-day and 200-day moving averages, they have resumed their uptrends and issued technical buy signals on the MACD, TSI, and momentum indicators. Meanwhile, the VIX is nearing its monthly lows just north of 25.00. A break of 20 would be an extremely bullish development for the broad market.
We wish our members a restful Memorial Day, and extend our deepest gratitude to those of you who are presently serving in the military or who have served this country in the past.
Last Week’s Economic Data:
Global Manufacturing PMI: Miss
New Home Sales: Miss
Initial Jobless Claims: Beat
Pending Home Sales: Miss
Core PCE Inflation: Neutral
Upcoming Economic Data:
Tuesday: Chicago PMI, Consumer Confidence
Wednesday: ISM Manufacturing, Global Manufacturing PMI
Thursday: ADP Employment, Initial Jobless Claims
Friday: Non-farm payrolls, Unemployment