Equity averages forming better bases

Intermediate
  • In articles already this week here and here we have highlighted basing effort by global equity averages (the S&P 500 and DAX).
  • These technical bottoming attempts have been reinforced through this week from the fundamental side by apparent progress in the US-Sino trade talks and further dovish comments from Fed speakers, with the FOMC Minutes on Wednesday reinforcing these dovish outlooks.
  • Here we revisit the S&P 500 future, which has recently neutralised an intermediate-term bear theme, with the asymmetrical risks towards an intermediate-term bullish shift.

 

S&P 500 E-Mini risks stay higher after intermediate-term bull shift

A dip and a rebound Thursday from within our 2561/60 support area (from 2360.5) to a new recovery high, to reinforce Wednesday’s push through key 2592.0 resistance (see below), and the earlier firm rebound from above 2510.0 support (off of 2523.25), to leave risks still higher Friday.

The early January push above 2592.0 set an intermediate-term range, we see as 2690.5 to 2438.5, BUT with skewed risks for an intermediate-term bullish shift above 2690.5.

For Today:

  • We see an upside bias for 2599.5/2600.0; break here aims for 2620/21 and 2639.75, maybe towards 2665.75.
  • But below 2561/60 aims for 2547.5 and maybe opens risk down to 2523.25.

Intermediate-term Range Breakout Parameters: Range seen as 2690.5 to 2438.5.

  • Upside Risks: Above 5 sets a bull trend to aim for 2819.0/31.25 and 2953.25.
  • Downside Risks: Below 5 sees a bear trend to target 2397.0, 2316.75 and 2228.0.

 

4 Hour Chart

sp500

Comments on this analysis


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