Equity markets basing efforts

Intermediate
  • A very erratic tone for global equity markets into late 2018 and to start early 2019, but the first week of the new year ended on a positive with risks skewed towards the upside.
  • A global equity market selloff into the Christmas holiday was then followed by a robust rebound before the end of the year, during very erratic, illiquid trading activity.
  • The start of the year on Wednesday 2nd January saw a guidance warning from Apple, that triggered a “flash crash” in FX markets, but the subsequent rebound into the end of last week have seen positive technical developments for the major, global equity indices.
  • On the fundamental side, a strong US Employment report, a somewhat dovish Jerome Powell and the upcoming US-Sino trade talks point to upside potential into mid-month for the major equity markets.
  • Here we spotlight the broad, US equity benchmark future, the S&P 500 E-mini.

 

S&P 500 upside threats

A Friday surge above modest 2493.5 and the better 2523.0resistance, thereby rejecting the early 2019 negative correction activity, resuming positive forces from the late 2018 rebound (from a new 2316.75 cycle low), to shift risks higher Monday.

The December plunge through 2609.5 set an intermediate-term bear trend.

For Today:

  • We see an upside bias for 2551.75; break here aims for 2571/72 and maybe key 2592.0.
  • But below 2510.0 opens risk down to 2470.25, maybe 2438.5.

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 2592.0 shifts the outlook back to neutral; above 2690.5 is needed for a bull theme.

 

4 Hour Chart

sp500

Comments on this analysis


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