The XJO is expected to open lower this morning, just below 8,850 at time of writing. The U.S was closed overnight.
During our session yesterday, U.S futures sold down heavily. Coupled with overheated short-term metrics, their red futures led our market lower through most of our session. However, in the late afternoon we managed to regain some of the day’s losses as we bounced off the lows of the previous session at roughly 8,850. This level could be now a tentative support that we will retest this morning.
U.S futures held onto their losses, with the SP500 selling off just shy of one per cent – a decent move that breaks their underlying uptrend line, and puts them at their recent lows. Their futures this morning reopened flat.
Yesterday we tried to break the short-term accelerated uptrend line, but ended up bouncing from it instead. This morning, we should break it provided we open at roughly 8,850. 8,900 is now clear resistance.
Our recent run had us overdue for a pullback, and short-term indicators need time and/or selling to mean revert and cool off. Yesterday and today will give our market an opportunity to reset. From here, it would make sense to see our market create a broader higher peak, and head back down to the broader underlying uptrend which comes in at roughly 8,750 to 8,800 depending on how long it takes for us to reach it. However, the recent strength in our market may persist, and this pause may be brief. Of course, it seems likely that it will come down to how the U.S trades from here.
Tomorrow night Trump will speak at Davos. Against a backdrop of new tariffs on European allies, the invasion of Venezuela, and the desire Trump has for Greenland, it may be a very interesting event. You never know with Trump.
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!