- The past week has seen correction activity across the major global stock markets as ongoing global economic slowdown concerns have impacted on riskier asset classes.
- However, a strong recovery effort over the past 24-36 hours has been a reaction to hopes on avoiding another global shutdown and also from positive soundings regarding US-Sino trade negotiations.
- This has seen the major US equity averages push to new 2019 and recovery highs, whilst European indices have pushed back close to 2019 peaks.
- Here we spotlight the pan-European benchmark average, the DJ Euro STOXX 50 and the US broad stock market measure, the S&P 500.
DJ Euro STOXX 50 upside risks resume
A solid Tuesday advance above resistance at 3182 and overnight above 3200, rejecting the negative, correction theme from earlier in February (through the 2019 bull trend line), to try to re-energize the intermediate-term bullish outlook, setting risks higher for Wednesday.
The mid-January surge above 3105 set an intermediate-term bull theme.
- We see an upside bias through 3201; break here aims for the cycle peak at 3213, maybe a key swing high at 3225.
- But below 3174 opens risk down to 3142.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 3255.
- Higher targets would be 3306 and 3429.
- What Changes This? Below 3025/22 shifts the outlook back to neutral; through 2931 is needed for a bear theme.
4 Hour Chart
S&P 500 intermediate-term bull trend extends
An extremely firm rally Tuesday to push above 2737.75 to a new cycle high and overnight through 2750.0, rejecting the recent correction theme and re-energizing the short- and intermediate-term bullish trends, setting the threats higher for Wednesday.
The late January above push above 2690.5 shifted the intermediate-term outlook to bullish.
- We see an upside bias through 2755.75; break here aims for 2763.75, maybe 2779/80 and even towards 2792.75.
- But below 2739.0 opens risk down to 2726.0, maybe 2702.75.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 2819.0/31.25.
- Higher targets would be 2953.25 and 2600.0
- What Changes This? Below 2612.5 shifts the outlook back to neutral; through 2560.5 is needed for a bear theme.
4 Hour Chart