Last week’s price action in US equity markets was dominated by a downshift in economic outlook by the FOMC, mixed US economic data, heightened concern over a “Yes” vote in the UK’s referendum on European Union membership and as a result, souring of investor enthusiasm. In fact, four out of five trading sessions on the week and five of the last six were not only negative, but decidedly so in terms of internals.
Friday was in fact a distribution day, as suggested would likely be the case in Thursday’s note. All three major US equity indices lost ground – led lower by the Nasdaq which shed 0.92%. The S&P 500 and Dow Industrials both lost 0.33%. Volume predictably rose sharply as a result of quad-witching. The NYSE saw volume rise by 32.41%. The Nasdaq’s volume rose by 33.43%. The escalation in volume, coupled with negative price action has confirmed for investors that resistance at the 2100 level on the S&P 500 will likely remain for some time, unless of course there is a shift in themes that have come to dominate our recent headlines and trends.
Visit GMAG Blog for my complete analysis. Markets are in the hands of the Brexit vote. Vote aside, there is little to encourage investors to engage the market from the long side.