March 5, 2008
To set the tone toady the ISM survey came in at 49.3 just above expectations of 47.5. The market found a little strength because it was above the 44.6 reading for January. In a separate report, January factor orders fell 2.5% and were in-line with forecasts. Expect more of the same tomorrow as the economic report keep flowing. Weekly jobless claims data are due before the market’s opening (8:30 AM) and January’s Pending Home Sales Index is due midmorning (10:00 AM). Look for the jobs number to set the tone before the open.
In the process of digesting all the economic data that was released today, as well as anticipation for news from ABK, it wasn’t surprising that today’s session was a choppy one. The midday spike, which was just reaction to the ABK halt, ran out of steam just as we approached resistance levels of the wedge formation shown on Monday’s and today’s charts. Unless we start see some sort of conviction by the bulls or the bear, this market could be in for a knockdown drag out fight between support and resistance. Don’t get frustrated or scared by all the choppiness. Barring any bombshells from the economic forefront, or the financial industry, these conditions tend indicate consolidation which could indicate some sort of rally in the near future.
Let’s review the charts…
The NASDAQ spent most of the day in positive territory. It didn’t close above the triangle resistance which is a little concerning. Tech can’t seem to get it together and remains weaker than the broader market.
The S&P closed in the positive for the second day in a row. Monster rally….not so fast!! The S&P looks to be forming a range.