Courtesy of John Nyaradi.
Friday will likely be a red day for major indexes
Major indexes will likely suffer today, due to continued Congressional impasse heading into the weekend and the release of potentially dangerous economic reports.
Major indexes reversed their 5 day losing streak yesterday, with the S&P 500 gaining .35%, the Dow Jones Industrial Average (NYSEARCA:DIA) adding .36%, and the NASDAQ 100 (NASDAQ:QQQ) rising .70%. Yesterday’s market “gains” were likely in response to the jobless claims report for the week of September 21st, indicating fewer jobless claims than the week before. Also, no major news, mishaps or breakthroughs were reported regarding the current Congressional impasse over the budget, although a poll by Bloomberg indicated that most Americans agreed to spending cuts alongside a debt ceiling increase. Suffice to say, yesterday did not have any “bad” bad news, so major indexes were actually allowed to even out.
Today, however, likely spells a different story. From a technical point of view, the S&P 500 (NYSEARCA:SPY) currently has a declining MACD (almost near zero) but a rising RSI, so it is really hard to tell just what the direction the index will go without looking at the fundamental picture. From a fundamental standpoint, I cannot see today going well for the Congressional debt debate, and I also do not see investors being bullish heading into the weekend with such political strife in the air. Unless Congress works a miracle and actually compromises on a comprehensive debt reduction bill, I think investors will be spooked all day long.
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