European and US equity indices still trying to form bases

Intermediate
  • Global equity averages have tried rebound effort over the past week into mid-December, after the rather aggressive selloff seen early in the month to new multi-month lows.
  • The recovery efforts into mid-month have reflected some relief that the trade war truce between the US and China is holding and optimism that behind the scenes progress is being made on this front.
  • However, the Asian trading week is ending on a more negative note, as Chinese Industrial Production and Retails Sales data missed expectations, highlighting an ongoing slowdown in the Chinese economy.
  • This saw Asian share markets move lower and now puts the basing efforts by European and US equity averages over the past week, under threat.
  • Here we spotlight the German benchmark, focusing on the DAX futures contract and the future on the US broad benchmark average, the S&P 500 E-Mini.

 

DAX future rebound risks intact

A high-level consolidation and prod higher Thursday to reinforce Wednesday’s solid rebound to overcome resistances at 10884.5 and 10944.5, still easing bear forces from the prior December plunge (below key 11002 support7), and despite the subsequent setback, whilst above 10812 keeping the bias to the upside Friday.

The early December plunge below 11002 set an intermediate-term bear trend.

For Today:

  • We see an upside bias for 10909.5 then 10981.5/11000; break here aims for the bear gap bottom at 11088.5, maybe the bear gap top at 11171.5.
  • But below 10812 opens risk down to 10724.5 and maybe 10678.5.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 10406.5 and 10000/994.5.

  • What Changes This? Above 11263 shifts the outlook back to neutral; above 11566.5 is needed for a bull theme.

 

4 Hour Chart

dax future

 

S&P 500 E-Mini Holding onto an upside correction bias

A Thursday consolidation of Wednesday’s solid recovery to probe just above the notable 2678.0/82.25 resistance area (to 2686.5), that eased bear forces from the recent December plunge below the key Q4 support low at 2603.0, to keep the bias to the topside Friday.

The December plunge through 2603.0 set an intermediate-term bear trend.

For Today:

  • We see an upside bias for 2656.0, 2671.0, then 2686.5; break here maybe aims for 2709.75/14.0.
  • But below 2621.25 opens risk down to 2591/90 and maybe 2583.0/80.0, even 2571.75.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 2552.0.

  • Lower targets would be 2529.0 and 2500.0.
  • What Changes This? Above 2720.75 shifts the outlook back to neutral; above 2814.0 is needed for a bull theme.

 

4 Hour Chart

s&p 500

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