Equities plunge after US Jobs report, but rebound sets risk higher

Intermediate
  • A fairly aggressive selloff for US (and also global) equity averages on Friday after a very weak US Employment report, reinforcing a very negative week for US stock markets and also global indices.
  • However, a firm intraday rebound into the close on Friday has avoided a more bearish signal and from a technical analysis perspective, sets risks back to the topside into the start of this week.
  • Here we focus in on the S&P 500, the US benchmark average.

S&P 500 E-Mini risks flip back to the upside

A notable selloff on Friday through key supports at 2729/26 (sustaining the Thursday move lower), but then a very robust intraday rebound rally from the trend line from mid-January and establishing NEW KEY support at 2722.0, producing a bullish Hammer candlestick pattern on the daily chart, to flip risks back higher for Monday.

The late January push above 2690.5 shifted the intermediate-term outlook to bullish BUT risk remains to test NEW KEY 2722.5 support for an intermediate-term shift to neutral and maybe to bearish below 2680.75.

For Today:

  • We see an upside bias for 2761.25; break here aims for 2776.25 and possibly towards 2783/84.
  • But below 2735/34 opens risk down to new key support at 2722.5, maybe 2702.75

Intermediate-term Outlook – Upside Risks: We see an upside risk for 2819.0/31.25.

  • Higher targets would be 2953.25 and 2600.0
  • What Changes This? Below 5 shifts the outlook back to neutral; through 2680.75 is needed for a bear theme.

 

4 Hour Chart

SP500

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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