Markets are flowing downstream like a fast-moving river, as investors look set to finish an ugly January with even more losses, after that sunshine session on Thursday.
Over at SpreadEx, Max Cohen said the S&P 500 is nearing its 150-day moving average, “a significant technical resistance barrier.
“Currently trading at 1,764.6, the 150-day moving average is still some 33 points away at 1,732.2. Having already smashed through the 20 and the 50-moving day average in the past three weeks, there is nothing to say we won’t go lower. However, with it being earnings season, a string of good company performances could turn the tide.”
Here’s what Sarhan Capital’s Adam Sarhan had to say to clients this week:
“The S&P 500′s next level of support is 1,767-1,772 (Dec. and Jan. lows) then 1,729 (Sept.’s high & its 150 daily-moving average). Meanwhile, the next areas of resistance: 1,776 and then 1,812 (50 daily-moving-average line). Of course, if support is breached — expect much lower prices to follow.”
Here’s T3 Live’s Scott Redler weighing in on Friday morning:
“Starting the year, we had three trends to trade. Sellers were able to break the accelerated trend at SPX 1,813-1,830ish. That was the first spot to reduce risk or change your process. Now the sellers will have their chance to break the intermediate trend at SPX 1,766-1,772 — if that’s your time frame, then you honor that level. A break or close below that level — then the 150-day can come into play in coming weeks at 1,733 and the 200-day under that is 1,705. Know what you can handle.”
It’s a lot of tech talk, but basically strategists are laying out the ground work for a messy Friday, unless things turn around, with a warning from Wal-Mart WMT -1.28%and some ugly numbers from Mattel MAT -10.73% and Amazon.com AMZN -7.81%,
But some see light. J.P. Morgan’s chief U.S. equity strategist, Tom Lee, told CNBC on Friday that 2014 is going to turn into a solid year, and markets are “within a couple of percent of the bottom.”
– Barbara Kollmeyer writes for MarketWatch. Follow her @bkollmeyer