US and European equity averages pointing North again

Intermediate
  • Last week we reported risks of a deeper correction to US and global equity markets.
  • Subsequent strong advances across Asian, European and US stock markets and averages have rejected a more negative theme and seen risks flip back to the upside into early April.
  • This morning has seen strong gains driven by optimism from Chinese Purchasing Managers Index data, particularly for Manufacturing.
  • Here we focus on the US benchmark average again, the S&P 500, but first the German flagship index, the DAX.

DAX intermediate-term bullish shift

A firm advance Friday and again this morning with a bull gap through a key resistance at 11640, to shift the intermediate-term outlook back to bullish.

Furthermore, this bull gap driven advance (gap at 11601.5-570) has built on Friday’s push through resistances at 11513/521.5, plus on the late March rebound, to leave risks to the upside for Monday.

For Today:

  • We see an upside bias for 11666 and 11685.5; break here aims for 11750.5, maybe the cycle peak at 11840.
  • But below the support gap at 11601.5-570 aims for 11508 and maybe opens risk down to 11456.5.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 11840/46.

  • Higher targets would be 12000 and 12455.
  • What Changes This? Below 11285 shifts the intermediate-term outlook straight to a bear theme.

 4 Hour Chart

DAX Chart

S&P 500 E-Mini upside threats

A solid rally Friday above notable 2835.0 resistance and a bull gap this morning (2844.5-40.75) through 2851.75, to build on last week’s rebound attempts, for now rejecting bear pressures from the prior March selloff from a new cycle and 2019 high at 2866.0, to keep risks higher for Monday.

The late January push above 2690.5 shifted the intermediate-term outlook to bullish, BUT concerns are growing for an intermediate-term shift back to neutral below 2726.5.

For Today:

  • We see an upside bias for 2860.0 and the 2866.0 cycle high; break here aims for 2875.0 and maybe towards 2886.75.
  • But below the support gap at 2844.5-40.75 aims for 2820.25 then maybe towards 2802.5.

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 Chart

SP500 Chart

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