Profit taking shouldn’t derail S&P500 bulls

News flow weighing on the equity market mood on Wednesday with not only Moody’s decision to slash Portugal’s debt rating into junk territory last night but also another rate hike from the PBOC rekindling China slowdown fears encouraging profit taking.  The e-mini S&P (ES1) futures have ticked down close to 7pts since the close as a consequence, hitting the 1,330.00 marker thus far, a touch above the first intra-day support level at 1,328.00. A crack here should see the faster money look to take the pair down in the direction of the more important 1,319.00/1,313.00 zone where there is some further intra-day support protecting the 100 and 55-DMA’s at the lower end of this band.  Our daily indicators suggest the market is by no means overbought however, let alone signalling a more meaningful top is in place, so our preference for buying weakness remains.  As we noted last week bulls shouldn’t be too ruffled whilst the market holds above 1,301 and we’d be surprised if the market can slide as far as that this week.