Start Small
Bears gaining strength ahead of the end of the week, triggered by jitters over the next Fed meeting on 17th and 18th. Improving retail data showed that consumption has improved a bit, while the report on jobless claims put a reminder that the labor market remains fragile.
With more expecting December tapering, it has to be kept in mind that tapering is not the same as interest rate hake; even if there’s any tapering this month, the Fed may start small instead of big. Budget deal helps improved the odds of tapering, however, but starting it with big cut will also be a risky bet for the Fed.
Mixed Data
US retail sales advanced 0.7% in November, faster than the 0.6% expected and 0.6% gains in prior month. Excluding automotive, sales slowed to 0.4% from 0.5% seen in October, but the reading also beat the consensus of 0.2% gains. Excluding autos and gas, sales maintained pace at 0.6%, twice faster than the consensus gains of 0.3%.
US Jobless claims rose to 368k, worse than 300k seen prior week as well as bigger than the consensus number of 320k.
Technically Speaking...
While the JCI maintained its range between 4,200-4,300, the poor showings from abroad threatens the index to take another go downhill this Friday.
Next resistance zone around 4,300-4,330 is likely to cap near-term advances while support now holds around 4,200, followed by the recent low at 4,161.
RSI and MACD bullish supports have been diminishing recently for the index, but should Friday see a surprise rally, these two may set up an improved outlook for the coming week.
RALS tripped its stop at 1,020, out for 7.27% losses. No new additions for now.
Day Ahead
The market is expected to be in jittery mode ahead of the Fed FOMC meeting in mid-month. Mixed data seen on Thursday as well as poor performances of global indices may further pressure the JCI this Friday. The week may end on a weaker footing, however. JCI is seen fluctuating between its familiar range of 4,200-4,300 with outer band of 4,161-4,330.
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