More Weakness

At least US stocks couldn’t go down yesterday. Equities are looking to open the day sharply lower on new concerns regarding the US-China relationship. Not helping matters is the fact that the latest round of US economic data that released this morning was disappointing as ADP Private Payrolls came in weaker than expected while Jobless Claims were a little higher than expected. 

The last thing you want to see the day after a 3%+ decline in the S&P 500 is another 1%+ decline at the open the following day, but that’s what today’s open is shaping up to be. In looking at the chart of the S&P 500 below, the fact that we were unable to hold above 2,800 for a third time on Monday is certainly a disappointment, but this latest swoon to the downside hasn’t violated any important levels as of yet.

Even with today’s implied open, we still won’t be making any sort of lower low. That doesn’t mean things will not get worse going forward, but we just wanted to provide some perspective of where things stand now. As always, we’ll be watching some of our key internal indicators for any further clues.

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