S&P 500. 1350 Anyone? Anyone?

Well would you look at that. The Spoo came up to 1492 yesterday (1496.75 was the high print on the e-mini), tried to find equilibrium around 1490 and then took a late day dive (reeejected). Continued to deteriorate today. The short term trend is down. Asia is taking it on the chin tonight. Data tomorrow will include TIC data at 8AM Central Time and Industrial Production and Capacity Utilization at 8:15. Again, a lack of negative news related to write downs for CDOs or other sub-prime related shenanigans might allow equities to stabilize. On the other hand, if the mortgage securitization process is frozen, seizing up the pipeline, won’t this have a further negative impact on the housing market and prices (who can get a mortgage to buy your house from you?)? So maybe this is just the beginning. Probably more shoes to drop. Looks like the Asians are catching on. Will this start changing expectations and risk-taking behavior in the Far East as people see fewer TEUs leave Shanghai for Rotterdam and Long Beach? Yikes.

Note on the chart below that the Spoo can descend all the way to 1350 and still be on the uptrend line extending back 3 years. The only problem there is that it will have then taken out the lows from March and August of this year and so will have taken an important step into going from the upper left to the lower right rather than from the lower left to the upper right, which is of course what everyone wants to see, if they aren’t short.

spoo_2007.11.15.jpg
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