Despite closing lower yesterday, things could have been worse in Wall Street as stocks closed well off their lows but it reaffirms a second consecutive daily drop - the first since the start of the month. The bounce could be argued from a technical perspective, after the S&P 500 ran into a test of its 100-day moving average (red line):
It is a crucial moment now for equities after the run higher failed to firmly clear 4,000 and the 61.8 Fib retracement level at 4,006 on the daily chart. If we do see buyers fail to keep a defense of the 100-day moving average, that might invite softer sentiment in the week ahead especially if bond yields also tick higher as the Fed continues to reaffirm a more hawkish tilt.
With the dollar at a checkpoint, broader market sentiment will be crucial in determining what comes next as well for the currency with little else on the economic calendar for the time being.
