US markets finish flat, XJO to open little changed
The XJO is expected to edge lower on open this morning, near 9,170 at time of writing. The U.S closed practically flat overnight, after retaking severe opening losses. Their futures are flat.
Yesterday U.S futures tanked on open, after Israel and the U.S started a war with Iran. Our market followed suit, opening almost 80 points lower, near key support at roughly 9,100 to 9,125 – our previous all-time high. However, we were there for only what felt like mere moments, with our market spending the rest of the session rallying back up. We were determined to finish in the green, and we did so right on the close. We held 9,200 resistance, which will be proven again this morning with our clear rebound from it.
Our Materials did all the heavy lifting. They have largely kept our market tracking sidewards at the top of the range despite all the negative news, and the profit taking in the Financials. They are overcooked in the short-term, like our market, and are due for some mean reversion and profit taking too. When, is hard to suggest, but it shouldn’t be too far away.
The attack on Iran and its subsequent retaliation is dominating the 24 hour news cycle. Despite the loss of life being tragic, with the current mania that is the geopolitical stage, helmed by an increasingly unpopular and erratic man, things are likely to move on quickly. Every week there is something new, and markets are becoming immune to the trials and tribulations of man. It is hard to know what will actually cause markets to correct.
For now, we continue to assume that markets will in general follow their underlying trends. Again, we are due for some mean reversion, but until we see otherwise, we should expect our market to track sideward to higher – albeit with extreme caution.
US Markets
US shares opened strongly lower initially overnight but rebounded to finish little changed from Friday’s close. This was despite the attacks on Iran and Iran’s response. There was strong volatility during the session, with big drops at points, though investors bought on dips. This shows an expectation from investors that
Four of the eleven sector groups of the SP500 closed higher overnight, with Energy, Industrials, and Technology the best performers. Staples, Discretionary, and Healthcare stocks saw the most selling.
Technically, the S&P500 again held the support level at 6,800 overnight. 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 a 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.
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