The XJO is expected to tank on open this morning, near 8,940 at time of writing. This follows a tumultuous night of trading in the U.S which saw their market break key support intraday, but retake roughly half the session’s losses to finish back above it. Their futures are flat.
Normality seems to have returned to our market. For a moment there, little made sense as we held gains despite U.S selling, poor CPI, and war with Iran. It seems this morning all of that has caught up with us.
8,900 is the next clear support, and it seems likely we flirt with it today. This is also roughly where the 50 day MA comes in – a point of comfort for our market in the short-term and the next clear target. Beyond these levels, 8,800 to 8,750 seems likely, which is also where the 200 day MA comes in. If selling continues, we should expect these levels to put up a strong fight.
U.S futures are flat this morning, but over the past couple of sessions they have moved hard into the red. Yesterday, they likely helped initiate the selling. If they do the same today, our losses could exacerbate. However, their market overnight showed they want to remain in their recent trading range, rallying back up strongly from their lows. Hopefully this means they experience a relief rally, and our own selling will be stemmed.
We have local GPD data this morning at 11:30 AEDT, which is expected to remain fairly stagnant. This data likely won’t be impactful, but if it shows strong economic activity, then it may add further fuel to the fire.
US Markets
US shares fell strongly overnight, though they managed to close well above the very dire lows from early in the session. The SP500 was down more than 2.5% at one point but finished to close less than one percent lower. The selling came as it has become clear that the Iran conflict will not be the same short-run thing as the first time around. Iran has promised to attack any vessel in the Strait of Hormuz, combined with production halts by several Middle Eastern oil and gas producers, has driven up global shipping rates and prices of crude and natural gas. The strait,
All eleven sector groups of the SP500 fell overnight, with Materials, Industrials, Healthcare, and Technology stocks seeing the most selling.
Technically, despite the selling overnight, which saw the S&P500 trade as low as 6,710, the index again managed to close above the key support level at 6,800. With the index in a channel between this support and the all-time high at 7,000. With the hold of support overnight, we would expect an eventual bounce towards the resistance at the all-time high of 7,000. Should the index fall however, and 6,800 break, we would expect further selling. We would need to see a break above 7,000 for more gains to look likely.
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!