The S&P 500 Will Likely Rise On Thursday

I predict a rise for the S&P 500 (SPY) on Thursday, based on the notion that investors may feel a glimmer of hope coming out of Washington. The S&P 500 added .06% yesterday, the Dow Jones Industrial Average (DIA) added .18% yesterday, and the NASDAQ 100 (QQQ) lost .46% yesterday.

Every one of my instincts suggests a market tumble tomorrow, but I believe markets will rise due to new glimmers of hope in Washington to possibly end the US Government Shutdown and debt ceiling debate temporarily. Although talks seem to center around a temporary re-opening of the Federal Government with the promise of budget talks afterwards, the mood has appeared to shift from a “possible default” to a “possible re-opening.” And, we have a new, extremely dovish Chairman of the Federal Reserve, Janet Yellen. Yellen has to count for something positive in these current markets!

Technically speaking, the S&P 500 looks as if it will continue to crash and burn, as the index has dropped well below its 50-day moving average and could sell off even more. The MACD in particular currently offers a strong omen for negative declines, as the MACD is at a -5.640 and continues to get deeper:

chart courtesy of stockcharts.com

Internationally, European markets finished red yesterday, and the Nikkei Index finished well into the green. The Hang Seng was negative again. A mixed bag as far as I am concerned.

US Futures Markets are through the roof however, suggesting higher prices tomorrow at the time of this writing.

The VIX Index (VXX) finally corrected itself yesterday as well with a 3.64% decrease, suggesting waning fears among investors.

Today brings us our weekly jobless claims report, the Import Price Index Report, and the Federal budget report, although we will likely only see unemployment claims due to the US Government shutdown. Oh, the irony.

Fun fact for the day: Credit Suisse predicts that the world will have eleven “Trillionaires” within the next two generations (courtesy of Marketwatch.com). And I thought being a millionaire was good enough!