By William Watts and Barbara Kollmeyer, MarketWatch Strategist:
S&P 500 could be a sell at 2,078
NEW YORK (MarketWatch) -- U.S. stocks bounced between small
gains and losses Tuesday after a small early rise pushed the Dow
Jones Industrial Average and the S&P 500 to all-time highs.
Also in focus for investors, the dollar tapped a fresh
seven-year high against the Japanese yen above Yen116, and Alibaba
Group Holding Ltd. retailer raked in more than $2 billion in sales
in a single hour.
The S&P 500 (SPX) and the Dow Jones Industrial Average (DJI)
fell slightly. The Nasdaq Composite (RIXF) was mostly flat.
A thinly traded session on Monday still sent the S&P 500
index (SPZ4) and Dow industrials (DJZ4) to fresh closing record
highs of 2,038.26 and 17,613.74, respectively. That marked the
fourth straight record close for both indexes. The CBOE Volatility
index (VIX) fell to its lowest level in seven weeks.
A sell signal for the S&P? Chris Weston, chief market
strategist at IG, said the S&P 500 could be a sell at 2,078. He
noted that over the last 18 months, whenever markets reach a point
when about 85% of stocks are trading above the medium-term 50-day
moving average, the index has hit a ceiling. Four near-term
catalysts for the next stock market crash
"Currently 78% of stocks are above the 50-day now, so a move to
2,078 would probably coincide with the top of the channel and back
up my view that funds may take some long exposure off the table,"
said Weston, in a note.
The Veterans Day holiday could weigh on volumes. While for Wall
Street stocks it is business as usual, bond markets and government
offices are closed, with no data for investors.
Investors will also be watching the dollar(USDJPY), which hit
fresh seven-year highs against the yen as it tapped Yen116. The
dollar pared gains to trade at Yen115.30 in recent action. As the
yen fell, the Nikkei 225 index rose 2.1%.
"The catalyst of a stronger yen in the medium term could be a
major change in the Federal Reserve policy. i.e. to keep interest
rates lower for longer, or to announce another QE [quantitative
easing] program if the U.S. economy slides in to a recession," said
Nour Al-Hammoury, chief market strategist at ADS Securities in a
note.
Boston Fed President Eric Rosengren said late Monday until there
is stronger evidence that inflation will return to 2%, policy
makers should stay patient about removing accommodation.
In an otherwise light day for economic data due to the Veterans
Day holiday, the National Federation of Independent Business said
its small-business optimism index rose 0.8 point to 96.1 in
October, a two-month high.
Alibaba's big shopping day: Shares of Alibaba(BABA) fell 3.2%
even after its big online shopping day -- "Singles Day" -- raked in
more than $2 billion in sales in one hour. See Alibaba's 'Singles
Day' bigger than Black Friday
Need to Know: Alibaba's potential 959,729% return and the retail
roar of Singles Day
Juniper Networks Inc.(JNPR) late Monday named Rami Rahim chief
executive officer, replacing Shaygan Kheradpir, who resigned with
immediate effect. Shares slid 3.8%. Read: Juniper CEO resignation
clouded in mystery
D.R. Horton Inc.(DHI) reported a rise in fiscal fourth-quarter
earnings, but missed consensus estimates. Shares were up 2.4%
Zynga Inc.(ZNGA) shares surged 8.5% after Jefferies lifted
shares to buy from hold, citing potential from high growth in
mobile games.
The U.S.-listed shares of U.K. telecoms giant Vodafone PLC (VOD)
jumped more than 5% after the company said it is improving across
its key European markets.
Other markets: European stocks tracked global markets higher.
Gold prices (GCZ4) rose around $12 an ounce as the dollar eased.
Oil prices (CLZ4) reversed declines and inched higher, with Brent
trading at $77.9. Read: Gold will signal when stocks have
peaked.
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