Morning Preview: Have Stocks Finally Topped?

Morning Everyone,

The US stock indexes have been making new records on an almost daily basis. However, I would call it more of a melt-up, rather than a rally. At the same time volatility is getting crushed and everyone is waiting for the point at which we finally get a sell-off.

Are we finally ready for a stock market correction?

I’ve been watching the S&P 500 (SPX) closely and in particular the 2540 level. Here we have a resistance level which is the upper trendline. There's no doubt we are severely overbought judging by most technical oscillators, and we must be getting close to a pullback. I’m getting set to position myself bearishly from 2540.

SPX – 240 min Chart.

Key Levels

Top Economic Data for the Week

Thursday

AUD – Retail Sales

EUR – ECB Minutes

Friday

USD – Non-Farm Payrolls

CAD – Employment

CAD – Ivey PMI