US and European equites threaten “melt ups”

Intermediate
  • In articles here and here last week we highlighted the resurgence of the 2019 “risk on” phase for equities into late April with a bullish break from the S&P 500, the US benchmark average.
  • Furthermore, European equity indices have also continued to extend their strong April bull run, with prospects for further gains into May.
  • With both the European and US earnings season showing a positive outlook for the corporate world, the short- and intermediate-term threats remain to the upside, with the financial media highlighting risks of a “melt up” for US and potentially global equity markets.
  • Here we spotlight both the S&P 500 and the German benchmark average, the DAX.

S&P 500 E-Mini hits another new 2019 high

A firm extension Monday to build on Friday’s strong advance, to another new 2019 high at 2951.5, still eyeing the continuation chart record intraday high at 2955.5 and the June 2019 contract all-time intraday peak at 2961.25, to keep risks higher for Tuesday.

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

For Today:

  • We see an upside bias for 2951.5; break here quickly aims for the key record peaks at 2955.5 and 2961.25, then towards 2966.0.
  • But below 2933/32 targets 2925.5, maybe 2917.25, which we would look to try to hold.

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 S & P 500 Chart

S&P500

DAX bull trend extends

A rebound from above our 12216.5/206  support area on Monday and a push higher to yet another new cycle and 2019 peak above 12379 to 12396.5 Friday to reject Thursday’s dip that held above our initial 12216.5/206 support area, thereby sustaining upside pressures from Wednesday’s strong rally to yet another new cycle and 2019 peak above to 12379, to keep risks to the upside for Tuesday.

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 1296.5 and 12416; break here aims for 12455, then maybe 12500.
  • But below 12283.5 targets 12216.5/206 and then maybe 12124.

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

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

4 Hour DAX Chart

DAX

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