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  • A rate hike by the Fed as expected on Wednesday 19th December, but the market had also anticipated a more dovish shift in overall tone.
  • The more cautious tone going into 2019 was expected by global markets, given growing signs of a global slowdown, a softening of the US data and also the selloffs already seen by the equity markets.
  • Although the FOMC did pare back the potential rate hikes for next year, a still relatively hawkish tone left equities markets vulnerable and markets have seen significant losses for US and global equities since the Fed announcement.
  • Below we spotlight the S&P 500 E-mini future.

 

S&P 500 E-mini bear trend resumes

A rebound effort straight after the Fed to 2593.5 which was quickly dismissed with a plunge below the 2528.0 low and also notable support at 2500.0, then lower again overnight through 2485.0 to reinforce the earlier December plunge below the key Q4 support low at 2603.0, to keep the bias to the downside Thursday.

The December plunge through 2603.0 set an intermediate-term bear trend.

For Today:

  • We see a downside bias for 2475,75; break here aims for 2466.75 and then 2456.75 and 2445.5, maybe 2430.0.
  • But above 2499/2500 aims for 2517.75 and opens risk up to 2547/49, maybe 2571/72.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 2415.75.

  • Lower targets would be 2344.5 and 2317.75.
  • What Changes This? Above 2720.75 shifts the outlook back to neutral; above 2814.0 is needed for a bull theme.

 

4 Hour Chart

sp 500