The S&P 500 closed at 1783.90 last Friday, lower by 0.19 percent for the week. The index has closed the last three weeks in the negative and is most likely to extend its losses into the fourth week running. This would become S&P 500's longest weekly losing streak since November of last year.
For the week, the index was down 0.75 percent as of Thursday's close. The declines accelerated after the FOMC reduced its monthly bond purchase by a further
In economic releases this week, the Markit PMI for the month of January was at 53.7, unchanged from the previous month. Factory orders declined 1.5 percent for the month of December after gaining by a similar proportion the earlier month. However, the numbers were better than analysts' expectations. ADP employment figures showed an increase in private sector employment by 175,000 in January from a month earlier. Weekly jobless claims came in at 331,000 for the week ending on
The Week Ahead
S&P 500 closed Thursday's session at 1770.60, up around 1.27 percent for the session. The index looks to have formed a base around 1738.00, failing to break below the levels after testing them during the first three sessions of the week. On the higher end, S&P closed Thursday's session just below the bottom of the near term bullish channel at 1771.00.
The gains may not sustain and the index could slide to 1640.00- 1650.00 over the next few sessions. However, there is a small possibility of the index inching towards 1800.00- 1815.00, if it registers a close above 1771.00 for 3-4 sessions in succession. At
Strategy: The index remains a sell on rallies strategy. Look to short the index from 1800.00 up to 1820.00.