The breakout above major four-star resistance continues, but so does the lack of participation; volume this week has been at the lowest of the year. However, yesterday’s rally was fairly broad being led by tech. Despite good earnings, the banks are fighting to hold ground and have underperformed greatly given the landscape.
Today’s weaker-than-expected UK inflation figures follow the slightly disappointing wages data we saw yesterday and as a result, the pound is falling for a second consecutive day. As we had suspected, the FTSE's selling on Monday saw no further follow-through and the index has now hit a new high on the week, no doubt supported by the weaker pound.
Venezuelan military rule of the state-run oil company PDVSA took an ugly turn after the Venezuelan military arrested two Chevron workers for what they say is graft and corruption. This comes as the American Petroleum Institute (API) reports a trifecta of draws in petroleum supply, and Morgan Stanly warning that U.S. refiners have had their fill of light shale condensate oil, something we have been warning about as well.
The S&P 500 is trading higher this morning after breaking out above major four-star resistance at 2679.75 and it now has its sights set on our major three-star resistance level above here. Strong earnings from Netflix after the bell, up as much as 7% premarket, boosted what began as an unenthusiastic breakout on lower than average volume due to the session already gaining 1%.
Today’s publication of key macro data from some of the world’s most important economies has been far from impressive, underscoring key central banks’ cautious approach about normalizing monetary policy.
The euro opened the week on a strong note, recovering back to last week’s high near the 1.2450 mark. Price action moved sharply higher on the European open at 2:00 am CT and saw further gains as the U.S. dollar weakened on frothy data and a tweet from President Trump.