On a relatively quiet session, we expect to see very little in the way of economic announcements that can move the market in of themselves, unless of course we get some type of nasty surprise. However, keep in mind that the Nikkei has not had a chance to react to the nonfarm payroll numbers, and the fact that we missed slightly in the United States suggests that perhaps the Nikkei will drift a little bit lower. Keep in mind, the Nikkei has plenty of support near the ¥15,500 level, so any type of bounce from there should send this market back towards the ¥16,000 level.
That being said, there are a couple of things that we will be watching. The Swiss PMI numbers will be a bit of a regional event, but a move below the 50 level would have the USD/CHF pair rising rapidly in our opinion. It will also have an effect on the SMI as well, assuming that you have the ability to trade that market.
Going forward, we have Construction PMI out of the United Kingdom, which in and of itself probably won’t move the market unless it is a huge mess. The British pound has been sold off rather drastically, and looks absolutely horrible. It is an in oversold state, and it’s probably only a matter of time before we get a bounce. If the number for Construction PMI is strong, it is possible that might be the catalyst to send both the FTSE and the GBP/USD pair higher for the short-term.
We also have the US ISM New York number coming out during the day. It’s not normally a major market mover, but with the S&P 500 falling so hard over the last couple of sessions, and essentially sitting right on top of an uptrend line, it’s possible that a stronger than anticipated number could send this market back up. If we get a number above 62 or 63, we feel that the market will probably bounce and perhaps have 30 or 40 points that it could possibly get. On the other hand, if we break down below the lows of the Friday session, more than likely head to the 1900 level. With that, our levels on the S&P for buying is above 1938, while selling is below 1915.