Analysis:
Friday's Analysis predicted that "the market will attempt to stay below 1,131 before rallying." Today the market did drop below 1,132 before bouncing off the support to settle lower. It is a matter of time before the market breaches the support and closes below 1,131. Neither the Factory Order nor the Pending Home Sales is positive enough to prevent a market retreat, as the Bulls resign to the fact that 1,150 is the market's near-term top. Looking ahead to tomorrow, the ISM non-manufacturing index will not deviate much from the already subdued consensus, and the market will be driven by events in Europe and US corporate earnings guidance.
Strategy:
Hold short at 1,122
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