Stock rebounds keep bull theme intact

Intermediate
  • An aggressive selloff Wednesday into Thursday for the major global stock averages as heightened concerns regarding the China coronavirus saw riskier assets sold.
  • However, a strong intraday rebound was seen, partially driven by the World Health Organisation labelling the outbreak an emergency for China but NOT for the rest of the world, plus from the strong demand for stocks that has underpinned trading this year and for Q4 2019.
  • Furthermore, earnings season marches on with companies continuing to beat expectations.
  • This leaves global equity indices pointing higher both today and through late January.
  • Here we focus on the future on the US benchmark average, the S&P 500.

S&P 500 E-Mini Future day trade outlook: Correction threat quickly over, risk back higher

A selloff Wednesday-Thursday from a new record high at 3337.5 through supports at 3324/23, 3317.25, 3312.25 and 3307.5/03.0, BUT then a complete reversal rebound from just below this lower support off of 3301.25, to fully reject the downside correction theme and flip risks back to the upside into Friday.

  • We see an upside bias for 3332.0 and 3337.75; a break above aims for 3350.0​​​​​​​ and maybe 3362.25.
  • But below 3322/21 targets 3313.0; through here opens risk down towards 3301.25.

S&P 500 E-Mini Future intermediate-term outlook

A December surge through the key 3158.0 peak signalled an intermediate-term bullish shift.

Upside risks: We see an upside risk for 3337.75 and 3500.0.

What changes this? Below 3260.75 shifts the intermediate-term outlook to neutral and below 3181.0 to an intermediate-term bear theme.

S&P 500 E-Mini Future Chart

S&P 500

Steve Miley

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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