The XJO is expected to edge lower on open this morning despite a strong fall in the U.S overnight. SP500 futures have moved marginally into the green, however.
Our market likely sees the selling last night as already somewhat priced in, and coupled with slightly positive SP500 futures, likely explains our muted open. Furthermore, tech was the one of the key areas of selling last night, which is hardly represented in our index.
Yesterday we managed to hold ground at roughly 8,200. We should test it again on open this morning, but it seems Tuesday’s out of the blue selling was a flash in the pan. If the U.S does continue to sell off though, the next clear target is roughly 8,100 key support which is also roughly where the 50 day MA comes in.
US Markets
US shares closed firmly lower overnight, with selling across the three major indices. US shares did see late buying after better than expected earnings results from Tesla, which has sent the NASDAQ higher on aftermarket futures trading. Overall though, it was a dour session, with little in the way of reasons for the pullback, other than prices are pretty stretched at current levels. US economic data did show slightly fewer than expected Home Sales, though not by enough to concern markets. Investors are also no doubt weighing up the different potential outcomes of the Presidential Election and how neither major candidate plans to reduce spending. Bond yields have been pushing higher recently and this could indicate that government debt levels are starting to concern investors.
Only two of the eleven sector groups of the SP500 closed higher overnight, which were Real Estate, and Utilities stocks. Every other sector closed lower, with Communications, Technology, and Discretionary seeing the most selling.
Technically, the SP500 fell to the key 5,770 level, which was previously the all-time high resistance. This level held as support overnight, so we will need to wait and see if the index bounces from here. Should it bounce, the recent all-time high at 5,870 is likely the resistance target to the upside. Should 5,770 support break, we could see a move back towards 5,670.
Want to continue reading?
This is only an excerpt from todays TradersCircle Members Morning Market Update and doesn’t include the key data and charts our traders are keeping an eye on every day. Become a member today for this plus full length mid-day and end of day updates, trade recommendations, trade group webcasts, and much more!