Equities plunge as trade war truce is broken by both sides

  • From the start of May and the Trump threat for higher tariffs on Chinese goods we have been highlighting intermediate-term topping threat for the major European and US equity averages, as highlighted here.
  • As we highlighted in yesterday’s report, further tweets over the weekend from Trump “have again fuelled the fire of market unease”, whilst retaliatory tariffs from China on US goods have sent global equity markets and indices plunging to new multi-week lows.
  • In today’s article we spotlight the German flagship average, the DAX and again the US benchmark index, the S&P 500.

DAX intermediate-term shift to neutral; downside threat

We have stated in May reports to clients that “the early April push through a key resistance at 11640 shifted the intermediate-term outlook back to bullish BUT with risk growing for a push below 11866.5/863 for an intermediate-term shift to neutral, maybe to bearish below 11675” and the break below the higher area set an intermediate-term range as 12337 to 11675, with risk to the lower level.

Furthermore, the Monday plunge switches immediate risks back lower for Tuesday.

For Today:

  • We see a downside bias for 11837.5; break here aims for 11784 and key 11675, maybe the bull gap at 11601.5-570.
  • But above 11933 opens risk up to 11983, maybe 12107.

Intermediate-term Range Breakout Parameters: Range seen as 12337 to 11675.

  • Upside Risks: Above 12337 sets a bull trend to aim for 12873 and 13000.
  • Downside Risks: Below 11675 sees a bear trend to target 11285, 11000/10900 and 10701.5.

 4 Hour Chart


S&P 500 E-Mini intermediate-term bear shift threat to key 2789.5

A Monday plunge wiping out positive pressures from Friday’s dip and recovery and Hammer candlestick, below the 2826.0/21.25 support area and 2813.75, re-energizing downside forces from the intermediate-term top from the start of May, flipping risks back lower for Tuesday.

The early May push below key 2877.25 support sets an intermediate-term range we see as 2789.5 to 2961.25, BUT with risk growing for a push below 2789.5 for an intermediate-term shift to bearish.

For Today:

  • We see a downside bias for 2800/2799.75; break here aims for key 2789.5, then towards 2775/74, maybe 2755.5.
  • But above 2830/31 opens risk up to 2865.5.

Intermediate-term Range Breakout Parameters: Range seen as 2789.5 to 2961.25.

Upside Risks: Above 2961.25 sets a bull trend to aim for 3000.0.

  • Downside Risks: Below 2789.5 sees a bear trend to target 2726.5, 2686.0 and 2627.75.

4 Hour Chart

S&P 500

Latest News

nikkei 225
Global equity index vulnerabilities

Global financial markets continue to react negatively to global trade war concerns. Asian, European and US equity averages have all rolled back lower this week into late May, damaging rebound effort made from mid-May. This sets the immediate risks lower and starts to resume the negative tone set during the significant selloff in the first … Continued

USDNOK and EURNOK mixed short-term outlooks

USDNOK retains a positive short-term tone within a broader, intermediate-term range. EURNOK has a negative short-term bias, also in a neutral, intermediate-term environment. This tells us more about EURUSD than anything else, that the risks for EURUSD are to the downside. USDNOK upside threat A resilient consolidation for much of May, digesting the later April-early … Continued

Dow Jones
US equity averages cling to a positive tone

A consolidation theme has emerged for the major US (and in fact European) equity averages over the past 1-2 weeks, with no significantly new bad news emerging from the ailing US-Sino trade negotiations. This has allowed equity markets to rebound and ease bear forces from the aggressive selloffs seen in the first half of May. … Continued

USDPLN breaking out for renewed bullish theme

Another push higher Tuesday and again into Wednesday, reinforcing the previous tentative breakout from the Ascending Triangle pattern above 3.8594 and 3.8644 resistances, leaving both short- and intermediate-term bull themes intact and aiming higher for Wednesday. The intermediate-term outlook is bullish, sustained by 2019 solid consolidation above the 38.2% Fibonacci retracement of the 2018 rally. … Continued

Forex Brokers in your location