Healthy US consumer sentiment supported stocks

BY Janne Muta

|March 29, 2023

The macroeconomic data released yesterday was mixed with the January Case-Shiller home price index declining and the March consumer-confidence survey indicating better than expected mood among the consuming public. At the same time, the Richmond Fed said their survey showed improved business conditions among manufacturers.

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Higher yields pushed Nasdaq lower but the index futures started rallying a couple of hours before the end of the cash session in New York. Rising yields pressured gold but didn’t help the dollar to rally. This allowed oil bulls to drive the price of oil higher. Today’s calendar is a little light with the main risk event being the Pending Home Sales release.

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Another higher reactionary low in DJ

DJ remains bullish if the 32 287 isn’t violated decisively (moves that are quickly rejected don’t count). The test of the next major resistance level is the March 22 high at 32 767 looks likely. If the market breaks below the 32 287 level we might see it drifting back to 32 160 or so. Even though the market has been somewhat careful in its moves it is creating higher lows and it hasn’t sold off. This is encouraging.

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Nasdaq rallies from support

NAS trades sideways between the January high at 12 894 and the 12 466 level. Yesterday the market created a higher reactionary low in the daily chart. This suggests the bulls are trying to push the market higher today. A decisive move below the 12 466 level would probably take the market down to 12 260.

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DAX is bullish but nearing resistance

DAX remains bullish above 15 078 but is once again fairly close to a resistance level. The higher reactionary low created yesterday is a positive sign though and suggests the market might soon be ready to break above the 15 300 barrier. If, however, the 15 078 level is taken out then we might see a move down to 14 960.

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Gold created a higher low

Gold is still in a sideways range below Friday’s high and yes there’s that a top-heavy weekly candle and a lower swing high so we might still see a deeper correction in gold. But yesterday’s rally that started well above the 1934 support created a higher daily low. This opens the possibility for a continued move higher as long as the market keeps on making higher lows.

So, keep an eye on price action and look for longs when you see evidence for bulls being in charge. If we see the market breaking supports we need to trade accordingly. If the market stays bullish it’s likely to rally to 1988 or so. Below 1934 we might well see a move to 1920.

The Next Main Risk Events

  • USD Pending Home Sales m/m
  • EUR German Prelim CPI m/m
  • EUR Spanish Flash CPI y/y
  • USD Final GDP q/q
  • USD Unemployment Claims
  • USD Final GDP Price Index q/q
  • CHF Gov Board Member Maechler Speaks
  • USD Treasury Sec Yellen Speaks
  • JPY Tokyo Core CPI y/y
  • CNY Manufacturing PMI
  • CNY Non-Manufacturing PMI
  • EUR ECB President Lagarde Speaks
  • EUR CPI Flash Estimate y/y
  • EUR Core CPI Flash Estimate y/y
  • CAD GDP m/m
  • USD Core PCE Price Index m/m
  • USD Chicago PMI
  • USD Revised UoM Consumer Sentiment

For more information and details see the TIOmarkets economic calendar.

Trade Safe!

Janne Muta
Chief Market Analyst

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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