© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
US traders had a break on Monday as Wall Street closed for President’s Day.
Equity bulls might need the rest after the tortuous progress made last week.
The S&P 500, at 1,520, sits a fraction shy of five-year highs, but the average change for the index over the previous five sessions was just 0.09 per cent. It rose less than 2 points over that period.
One positive, from a bull’s perspective, of this grind is that momentum indicators are no longer flashing red.
The S&P 500’s 14-day relative strength index has dropped back below the “overbought” 70 mark and is now 66.4.
Healthy consolidation or the start of a stall? The answer may depend on whether discounted concerns – the eurozone and US budget wrangling – rear up again.
On the former, the chart shows the S&P has been able to dislocate from the euro over the past few weeks. The stronger dollar is not the automatic “risk” rally killer of recent years. But the Italian election could trigger more eurozone strife.
Meanwhile, Walmart has alluded to the hit to US consumption from fiscal cliff-linked payroll tax increases. Is that baked into the market?
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.