As of this typing we have sliced through 1040 as if it did not exist and popped to 1042. So from here we can once again use 1040 as a pivot point. As I wrote in the weekly summary, if this holds you have significant upside potential, perhaps 30 points to S&P 1070ish before any real issues arise. Hence one could place long oriented plays with an understanding they are to be retracted if 1040 is broken. One advantage for bulls today is as part of the changing nature of markets, I've noticed markets rarely go through intraday reversals anymore. It still happens but nowhere near the rate 4-6-10 years ago, especially if the first hour is strong in one direction or the other. Therefore, probability says a strong open almost guarantees a strong finish. Or at worst sideways action for the other 6 hours as HAL9000 churns the market to "create liquidity" (and collect rebates).
Either way, one of these days where it just seems technically oriented computers are going to reach levels they were programmed to hit, news or no news.
- Service industries in the U.S. expanded in June at a slower pace than forecast, indicating the economy was beginning to cool entering the second half. The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90% of the economy, fell to four-month low of 53.8 from 55.4 in May. The June figure was less than the median forecast of 55 in a Bloomberg News survey. Readings above 50 signal expansion.
- Orders slowed and employment declined. The group’s index of new orders for non-manufacturing industries declined to 54.4 in June, the lowest this year, from 57.1 a month earlier. The employment gauge fell to 49.7 last month from 50.4.
We talked about that big range, S&P 1040 to 1100, with 2 sub ranges : 1040 to 1070 and 1070 to 1100 for a few months. That is now back in play as long as 1040 can be the floor.