The XJO is expected to open flat this morning following a tumultuous night of trading in the U.S which saw their market give up intraday gains to finish also flat.
Our market seems to have formed a base here, roughly around 8,200 to 8,250 key support. Yesterday we managed to retake some intraday losses to finish only marginally in the red, and this morning our muted open should is a sign we are set to continue this moment of consolidation.
Our market and the U.S feel a bit delicate at the moment. Following a spat of hard and fast selling, it isn’t surprising to see the consolidation along support and the broader underlying uptrend lines. Where to from here is hard to discern. It wouldn’t be surprising to see the buy-the-dip mentality hold fast and lead to a relief rally, which seems the most likely outcome for now. Again however, markets are delicate, and likely don’t need much of a trigger to continue selling. Broadly speaking, roughly 8,100 is a good target for our market as that is where the 200 day MA roughly comes in.
US Markets
US shares were mixed but mostly higher overnight, with a rebound in technology stocks helping the SP500 and NASDAQ to close in the green, while the DOW JONES closed lower. After US markets closed, NVIDIA reported better than expected results, and at the time of writing, NVIDIA was around 2% higher in after-market trading. Investors are increasingly viewing Trump as a major threat to share markets. The implementation of tariffs, the cuts to welfare for poor Americans, the cuts in taxes for the rich, the destruction of the Western alliance, the cuts to US government workers, and many other questionable policies are working to destroy confidence. Consumer confidence tanked in February and that is starting to be reflected on the share market. Some economists are now suggesting that things could start tipping towards a recession; however, prices (inflation) are also expected to increase due to the tariffs (and a lesser extent the tax cuts). The market is happy to hold near its highs with the level of liquidity coming in due to the increasing deficit, but the likelihood of a big crash is definitely starting to increase.
Four of the eleven sector groups of the SP500 closed higher overnight, with Technology the strongest performer. Consumer Staples stocks saw the most selling as Trump’s first budget cut spending on food stamps and other welfare benefits.
Technically, the SP500 overnight showed signs of bouncing from its longer-term uptrend line, which formed since the rebound in October 2023. The overnight bar was definitely not a convincing bullish signal however, and we need to wait for a break away from this line. Assuming a bounce for now, it could suggest a move back towards 6,000 index points. With a break lower, we could see a move back towards 5,870 index points.
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!