US equity indices question the immediate bull trend

Intermediate
  • A rally and then a plunge back lower on Wednesday for the major US equity averages, after the FOMC rate decision, statement and conference.
  • The tone from Fed Chairman Powell was that a rate cut in the near term is unlikely, which impacted negatively on US stock indices
  • This has eased very short-term upside risks with markets previously at or near all-time highs, shifting the immediate threat to the downside.
  • Here we put the spotlight on downside threats for the broad US benchmark average, the S&P 500 future.

S&P 500 E-Mini topping threat and downside risks

A rally failure and a plunge lower Wednesday after the Fed decision, down through multiples supports as low as 2917.25 and just holding at a key 2914.25/10.25 area, to signal a possible short-term top and shift risks lower for Thursday.

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

For Today:

  • We see a downside bias for 2922/21 and 2914.25/10.25; break here aims for 2900.0 and the 2889.5/85.25 area.
  • But above 2636/37 opens risk up to 2645/46, maybe towards 2956.0.

Intermediate-term Outlook – Upside Risks: We see an upside risk for 2961.25 and 3000.0

  • What Changes This? Below 2877.25 shifts the outlook back to neutral; through 2726.5 is needed for a bear theme.

4 Hour Chart

S&P 500 Chart 2019-05-02

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