The XJO is expected to edge lower on open this morning following a small pullback in the U.S overnight. Their futures are also marginally in the red.

Markets seem to be quiet. Perhaps we are waiting for U.S unemployment data tonight. Now that the U.S has received rate cuts, now what? Are more on the table? If so, that would indicate that the U.S is heading towards recession. Are they off the table? Well then, we are either heading towards inflation again or stagnation. Its reasonable to suggest the market is unsure, especially considering we are trading at the top of the range, and with little new news to pull us back. Regardless, markets will continue to monitor key macro-economic data, and treat is the driving force for broader market trends. This could be because it remains relevant, and/or because it is just the status quo.

In the medium term, markets look set to grind sideward. Buyer fatigue has clearly set in, and it is hard to know what will drive markets into fresh highs. In recent history the pump has self-perpetuated, but it seems to have run out steam. Markets will likely need a jump start to make any reasonable ground. Perhaps that will be the employment data tonight.

We should test 8,175 this morning which is where the uptrend line comes in roughly. It seems like we should hold roughly these levels today, though U.S futures are in the red. If they remain so, our market could be dragged further down today, but we shouldn’t expect too much movement regardless. Roughly 8,300 remains key resistance and 8,100 is the most recent trough.

We should remain cautiously bullish to sidewards. Even if the uptrend line breaks, we should not assume a change in the trend, but rather a shallowing out of it. When the market changes tune, it will likely come with a bang and not a whimper.

US Markets

US shares closed modestly lower overnight, with selling across each of the three major indices. There was a lack of major news or events and instead prices drifted lower with the recent negative news, which includes the East Coast dock strike, Hurricane Helene, and the rising middle-eastern tensions. Regardless, tonight’s jobs report will be the defining event for US markets this week. Unemployment is expected to remain steady, which should be positive for markets. However, should unemployment come in worse than expected, we are likely to see markets sell-down. Overall, following the US rate cut last month, momentum seems to have somewhat slowed. US company earnings reporting will also start next week, and it could also be a trigger for market movement.

Only three of the eleven sector groups of the SP500 closed higher overnight, with energy stocks again the strongest performers. Most sectors closed moderately lower, with Discretionary, Materials, and Real Estate the worst performers.

Technically, the SP500 has stalled out at potential resistance around 5,770 earlier this week, which would would have to break for further gains to look likely. Overnight the past two session the index may have found some support at the previous all-time high around 5,670, which would have to break for further selling to look likely.

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