S&P 500 held up reasonably well Friday as it took many hours to break low 4,280s. Not that Mideast news would be providing relief – and sectoral view had been consistently deteriorating during the day, allowing me to make not only swing trading shorts, but also intraday ES and DAX short calls to benefit clients. I also did call for the 200-day moving average break, and for this downswing not to be over. We ended the week on a bright note, and unlike the preceding one, the excessive bearish positioning on Mideast isn't there now (possibly on account of diplomatic efforts and Israel‘s hesitancy to start ground offensive) – meaning it could materialize on actual developments, and add to selling pressure next week. I simply view the start of a relief rally as too soon – apart from a possible bullish gap, not likely to happen within a couple of hours of Globex open on Sunday.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 and Nasdaq Outlook

Bears confirmed the initiative following 4,330 break, and not even 4,278 was able to stop the selling – my Friday‘s article thoughts were confirmed. 4,260 also gave, proving the bears‘ strength. Contact with 200-day moving average isn‘t the reason to buy – conversely in this case, I would be expecting selling into strength when it comes to upcoming GOOG and MSFT earnings.

Copper

Copper is acting weak, and that has to do with the real economy on track to enter recession no earlier than 3 months from today. Prospects for acceleration are faltering for 2024, and a hard landing is unavoidable.

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