Global Equities send mixed messages, both vulnerable and resilient!

Intermediate
  • Global equity averages sold off heavily on Tuesday, with many of the major averages in Asia, Europe and the US pushing below the bear selloff lows posted in early October.
  • Although this activity has reinforced the intermediate-term bear trends on one hand, the intraday rebounds actually set markets up for further recoveries into Thursday and maybe Friday.
  • From a technical analysis perspective, intermediate-term bear themes are very much intact, but there are hints that the turnarounds seen Wednesday could see the beginning of a more sustainable basing phase.
  • Here we look at the DAX and S&P 500.

 

DAX (Dec’ ’18 contract)

Intermediate-term bear trend extends, but bounce bias

A Tuesday bear gap (now 11425-483) to plunge through the cycle low at 11383 and notable support at 11380, to reinforce our intermediate-term bear outlook, but then an intraday rebound from 11216 to partially close the opening bear gap and to leave the bias for a further rebound higher Wednesday.

The selloff through 12024 and also the cycle low at 11846 set an intermediate-term bear trend.

For Today:

  • We see an upside bias for the resistance gap at 11425-483, then towards 11600/05; break here aims for 11686.5.
  • But below 11300 opens risk down to 11216, maybe towards 11176.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 11122.5 and 11000, then deeper to 10406.5

  • What Changes This? Above 11838 shifts the intermediate-term outlook to neutral and above 11194.5 to a bull theme.

 

4 Hour Chart

4 hour dax future

 

S&P 500 E-Mini (Dec’ ’18 contract)

Intermediate-term bear trend reinforced, but rebound threat

A plunge lower Tuesday reinforce our intermediate-term bear outlook with the extension below the cycle low at 2712.25 and just through firm 2018 swing support at 2696.75, but then a very solid intraday rebound has indicated a very short-term downside rejection and shifts risks back higher for Wednesday.

The extremely aggressive selloff through 2853.5 and multiple intermediate-term supports in early October set an intermediate-term bear trend

For Today:

  • We see an upside bias for 2754.75, then 2782.0; break here aims for 2800.5, maybe towards 2807.25.
  • But below 2736.75 targets 2720/19 and opens risk down to 2692.25, maybe 2683.75.

Intermediate-term Outlook – Downside Risks: We see a downside risk for 2716.5.

  • Lower targets would be 2696.75 and 2683.75, maybe even 2606.25
  • What Changes This? Above 2824.25 shifts the outlook back to neutral; above 2889.5 is needed for a bull theme.

 

4 Hour Chart

sp 500
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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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