Major averages closed mixed yesterday and in the lower half of their respective trading ranges on lower, though above average volume. The Russell 2000 Index undercut its prior late August lows while the S&P 500 Index pulled down to a point that is roughly even with its own late August lows, all of which naturally sets up the potential for a reaction bounce, and we are seeing that this morning in the futures. Futures are up more than 1% at the time of this writing as Chinese consumer sentiment came in above expectations. European markets are consequently up more than 2%.
It seems as if world markets are dancing to the economic beat out of China, with reports showing a slowing economy met with gap downs the following day in the US markets, while with positive reports such as the one out of China yesterday on consumer sentiment, the market gaps higher. Technically, however, the market was in a position to bounce after six straight days of downside movement. While the downtrend in US markets seems intact, expect heightened levels of volatility.
Fed Chairwoman Janet Yellen is slated to speak at the St. Louis Fed conference today at 3 pm EST, which could have an impact on markets.
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