Equity averages rebound, aiming higher again

Intermediate
  • Setbacks early this week for the major, global equity indices have reflected both bullish fatigue heading into earnings season, alongside concerns regarding trade tensions between the US and Europe (despite the positive soundings from US-Sino trade talks).
  • Wednesday brought a slew of economic events, including UK GDP, US CPI, the ECB decision and FOMC Meeting Minutes, with the net result being rebounds for the global equity averages after the recent pullbacks.
  • This activity points towards further upside gains both today and potentially into and through mid-April.
  • Here we focus on the German benchmark, the DAX, but firstly the US broad yardstick index, the S&P 500.

S&P 500 E-Mini upside threat

A bounce Wednesday from above the firm 2862.25 support, off of our new 2877.25 level, sustaining upside forces from Monday’s new cycle high exactly at the psychological/ option barrier at 2900.0, plus from the early April bull gap (2844.5-40.75) to push above the March cycle peak (at 2866.0), to keep risks higher for Thursday.

The late January push above 2690.5 shifted the intermediate-term outlook to bullish.

For Today:

  • We see an upside bias for the new cycle high at 2900.0; break here aims for 2911.75, maybe towards 2924/25.
  • But below 2877.25 aims for 2862.25 and opens risk to 2853.75.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 2955.5/61.25 and 3000.0

  • What Changes This? Below 2726.5 shifts the outlook back to neutral; through 2686.0 is needed for a bear theme.

4 Hour Chart

SP500

DAX restarting bull forces

A rebound Wednesday from just above our 11863 support (from 11866.5), to try to reject the recent correction theme lower and resume upside forces from the earlier April firm advance to another new cycle peak through the psychological/ option target at 12000 (to 12053), plus from the strong bull gap driven advance (gap at 11601.5-570), to keep risks to the upside for Thursday.

The early April push through a key resistance at 11640 shifted the intermediate-term outlook back to bullish.

For Today:

  • We see an upside bias for 11986; break here aims for 12053 and 12087/88, even 12136.
  • But below 11866.5/863 targets 11784and then maybe 11722.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 12000, 12455 and 12873.

  • What Changes This? Below 11285 shifts the intermediate-term outlook straight to a bear theme.

 4 Hour Chart

DAX

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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