Even Santa, it appears, is having a hard time delivering this gift.
The S&P 500 kissed the 1120 mark this morning, but so far hasn’t been able to hold it. That number, 1120, is just about the halfway mark between the S&P’s all-time high in October 2007 and its recession low in March. This morning’s surprising report on new home sales may have had something to do with it – when even the headline on the spot news story uses the word “collapse,” you know it’s bad – and the reports on personal income and spending and the University of Michigan’s consumer sentiment number were slightly below expectations.
But stocks have been caught under this ceiling since the middle of November, and despite this little Santa Claus rally, 1120 remains a stubborn resistance, as evidence again this morning.
“Technically, we are still in the consolidation rectangle that has been building for four weeks,” UBS’ Art Cashin wrote in his morning comments.
On the other hand, most of these feints higher have been followed by a move back down to the 1090 range. If that doesn’t happen this time, equities may have an easier time getting past this range.
