Talking Points:

S&P 500

To start the week, markets will be closed on Monday in observance of President’s Day. Turning to the economic calendar, the only ‘high’ impact release will come on Wednesday with the FOMC minutes from the January meeting. It’s not expected to be a big market-mover, but traders should be on their toes nonetheless. For all data releases, see the economic calendar.

The S&P 500 had an impressive rebound last week, but may be at important crossroad as the possibility of a significant lower-high is in the cards. However, if we don’t soon see the index turn, then the old highs could soon come into play shortly. Whether the market is headed higher or lower look for a period of churning as some testing of the bounce gets underway. Either way, next week should see more two-way trade.

S&P 500: Daily

DAX

Looking ahead to next week the calendar is relatively light, with the only ‘high’ impact data set to be released is on Tuesday with Zew surveys for both Germany and the Eurozone. Uncertainty surrounding Germany’s political future and general risk trends will be dominant themes.

The DAX hasn’t seen the same kind of buying we saw in the U.S. markets or in Europe in general (the CAC experienced a much larger bounce.) There is room for the German benchmark to play catch-up if risk continues to rally, but in the event we see it wilt again look for the DAX to be a leader to the downside. On the top-side the area of interest from the standpoint of resistance doesn’t arrive until near 12750. On the down-side, the Wednesday reversal low is first up as support (12075), followed by 12k, then 11935/868.