The XJO is expected to jump on open this morning, following another session of gains in the US on Friday. XJO futures are pointing to an open around 8,665, a rise of about 45 points from our close on Friday.
US markets rebounded on Thursday and Friday after lower-than-expected inflation numbers, which opens the door for more US rate cuts in early 2026 when coupled with the weaker data earlier last week. This caused their markets to rebound back towards their all-time highs, and in turn, helping drag our market higher in the short-term.
On Friday we continued the bounce off key support at roughly 8,550. That level also represents the lows of the recent consolidation range we have largely been trading in since late November. This morning we should test the top of the range, represented by key resistance at roughly 8,650 to 8,675.
With the U.S looking bullish, don’t be surprised if we continue higher today. There is room for them to their next resistance, and the market may buy on the momentum of a potential Christmas rally. 8,700 represents the high of the false break we have last week and represents the next clear target.
One must wonder how much gas there will be in this run up, and question the longevity of it. it is hard to suggest weather the U.S will break through or stall at resistance. Regardless, not much has changed locally, and the U.S is rising on hope – which can lead to a strong short-term rally, but beyond that, question marks remain. It is reasonable to suggest that profit taking will follow.
US Markets
US shares closed higher again on Friday, with prices continuing to rise after Thursday’s better (lower) than expected inflation numbers. This does open the door for further potential US rate cuts in early 2026, though markets are still only predicting 2 rate cuts next year, which is unchanged from before the inflation numbers. The gains were largely led by AI titans oracle and NVIDIA, which jumped on hopes that there were more legs to the AI story. The index now looks poised to rally into the end of the year, with bullish technicals, and little in the ways of scheduled news or events that could disrupt the optimism in the short-term. Still, prices are extremely high, so gains could come slowly.
Seven of the eleven sector groups of the SP500 closed higher on Friday, with Technology, Industrials, and Healthcare the best performers. Utilities were the only stocks to see notable selling on average.
Technically, the SP500 recently stalled out at the 6,900 all-time high resistance and pulled back. The index now looks to have set a higher trough and is rising off potential support around 6,750, which is also roughly where the 50-day moving average sits. On Friday, we saw a bullish candlestick and the stochastic is also turning to cross an point higher. This indicates a technical gain to resistance at 6,900.
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