Coming Week Market Movers: Light Calendar Means Resistance, Money Flows Key

Includes: DIA, QQQ, SPY
by: Cliff Wachtel

Part 2: Coming Week Market Movers

Barring a major surprise event like spiking PIIGS bond yields or spike in Iran war threats, here are the likely market movers for the coming week.

Technical Resistance Levels For Major Stock Indices, Risk Assets

With the bellwether S&P 500 index only ~11% off its decade-plus high of ~1560, and things still looking far worse than they did the last time it hit this level back in 2007, (when the sub-prime crisis was considered minor, real estate prices were near their highs, Lehman Brothers bank was AAA rated, and Greek bonds only paid slightly higher yields than those of Germany) the chances grow for some normal retest of support.

Short Term Money Flows Moving US Bond Yields and Major Stock Indices

With a typical mid-month light economic calendar, the interaction of short term money flows into equities and credit markets, either to take profits or challenge prevailing resistance levels, could also be key to determining the very sentiment that drives them. Sound like circular reasoning? Agreed, that’s the situation as I see it.

EU PMI Figures

These could potentially confirm or shake the ongoing calm about the EU. With risk asset markets already high, mostly due to the sudden calm about the EU sovereign debt and banking crisis (see Part 1 for details), anything that affects sentiment on the EU could have a ripple effect on global markets.

Other Economic Calendar Events

The big themes in this light calendar week not already mentioned above include key UK data, US housing, and, China HSBC Flash Mfg PMI.

See any decent economic calendar like that of for details and dates.

Disclosure/disclaimer: No positions. The above is for informational purposes only. All trade decisions are solely the responsibility of the reader.