Daily Analysis

September E-mini S&P 500

The inability to take out last week's high and valuation questions by investors could be setting up the September E-mini S&P 500 for a lower close on a weekly basis for the first time in four weeks.

All week long investors have been questioning why stocks are valued so high given the state of the economy.  Investors want to see more from corporations proving that the economy is indeed improving.  Investors realize that although many corporations showed better than expected earnings, these gains were caused by cost slashing rather than increased revenues.  During the third quarter investors are going to be demanding more from corporations.

Currently the September E-mini S&P 500 is trading range bound between 990.00 to 1016.00.  There is the potential for breakouts in either direction because of thin trading conditions.  There are several reports today including CPI and production, but Michigan consumer sentiment is expected to set the tone in today's market because of yesterday's weaker U.S. Retail Sales. Equity investors want to see proof that there is a bearish trend developing in the economy and consumers seem to be the best indicator of this trend.