14 Oct 2013
US equity futures down nearly 1% to start the week – reflecting lack of weekend progress in D.C.
FXstreet.com (Barcelona) - Global investors, managers and traders are sending a very clear message to US politicians via the S&P 500 futures to get their collective acts together and work out a budget compromise in advance of the 10/17 debt-ceiling deadline.
Bearish traders who were forced to cover up heading into the weekend re-establishing positions
The US equity markets put on what traders would label a face-ripping rally last week on the hopes and rumors that US Republicans and Democrats would be coming to an agreement on the budget and spending issues that would allow the government to get back up to full speed and for the debt ceiling to be raised. When reports came out Sunday morning in the US that steps were actually taken in the wrong direction in the discussions, you could almost feel the mood of global investors turning sour once again. It is quite clear that the resolution or failure to resolve in this situation is a binary event for risk markets – especially the US equity markets.
Technical outlook for US equities
So far, the weakness in the S&P 500 futures is just a partial give-back of last week’s rally. Support comes in at 1679, 1672 and 1666 – all three of which are Fibonacci retracements of last week’s sharp rally. Resistance obviously comes in at Friday’s high of 1700.25 and is backed up by the 9/19 high of 1726.75.
Bearish traders who were forced to cover up heading into the weekend re-establishing positions
The US equity markets put on what traders would label a face-ripping rally last week on the hopes and rumors that US Republicans and Democrats would be coming to an agreement on the budget and spending issues that would allow the government to get back up to full speed and for the debt ceiling to be raised. When reports came out Sunday morning in the US that steps were actually taken in the wrong direction in the discussions, you could almost feel the mood of global investors turning sour once again. It is quite clear that the resolution or failure to resolve in this situation is a binary event for risk markets – especially the US equity markets.
Technical outlook for US equities
So far, the weakness in the S&P 500 futures is just a partial give-back of last week’s rally. Support comes in at 1679, 1672 and 1666 – all three of which are Fibonacci retracements of last week’s sharp rally. Resistance obviously comes in at Friday’s high of 1700.25 and is backed up by the 9/19 high of 1726.75.