Summary:

• Uni Mich comes in at 2nd highest in 14 years
• Print of 99.7 vs 99.4 expected
• US500 set for large weekly drop

Consumer sentiment in the US remains high by historical standards with the latest survey beating forecasts. The revised University of Michigan consumer sentiment index for February came in at 99.7, slightly lower than the prior reading of 99.9 but still above the 99.4 forecast. Despite the downwards revision the print is still the second highest in 14 years and suggests that US consumers remian in a buoyant mood. 

 

 The latest strong print in the Uni Mich has extended a strong run seen throughout this decade. Source: XTB Macrobond

despite the positive data its looking like another day of declines for US stocks with indices around the globe experiencing fairly major selling this week. The US500 has shed 140 point from its high of the week at 2791 and the price action has been pretty ugly with a rally at the start of the week subsiding and the sellers taking control of the tape.

Fib retracements of the decline seen at the start of Feb have been working pretty well recently in identifying support and resistance with price earlier today making a break below the 38.2% at 2664. The 23.6% at 2613 is an area to keep an eye on going forward but should the market move below here then we could be set for a test of the prior swing low at 2530 – which would need to hold to prevent another leg lower. 

 

 The US500 has fallen to its lowest level to the week after breaking the 38.2% fib at 2664. Source: xStation