|Day's range||7,022.30 - 7,073.99|
|52-week range||5,895.12 - 7,700.56|
Based on last week’s price action and the close at 7063.75, the direction of the March E-mini NASDAQ-100 Index this week is likely to be determined by trader reaction to the Fibonacci level at 7022.25.
Last week’s price action in the Treasury markets, the U.S. equity markets and the U.S. Dollar strongly suggest that those calling for a top in the U.S. economy based on the headline inflation number, the weak retail sales report and the drop in industrial production, have wrongly determined that the U.S. economy has topped.
A positive outlook for U.S.-China trade relations encouraged investors to overlook the noise created by worries over a slowing economy and earnings growth. The retail sales and industrial production declines represented only one occurrence and not a trend. Furthermore, the data was taken during the government shutdown which may have skewed the results. If so, then the effects of any short-term disruptions will smooth out over the long-term.
Based on the early price action, the direction of the March E-mini NASDAQ-100 Index is likely to be determined by trader reaction to a short-term uptrending Gann angle at 7001.00.
Trade-related optimism supports global stock indices while weak data in the US sends the USD moving lower versus major world currencies.
As far as the major indexes are concerned, the S&P 500 Index was boosted by solid gains in the industrials and energy sectors. The energy sector was supported by higher energy stocks, which were boosted by higher oil prices. Strong performances in shares of Newfield Exploration, Apache and Devon Energy were primarily behind the strength in the sector.
The major indices were all in the green in early pre-opening trading with the tech-heavy NASDAQ Composite in the lead posting an advance near 0.45%.
The major Asian markets are following the lead of Wall Street which produced stellar gains on Tuesday. Both regions are being under pinned by the positive view on U.S.-Chinese relations, while the U.S. markets are getting an extra boost by the news that the government shutdown may be averted.
Based on the price action late in the session, the direction of the March E-mini NASDAQ-100 Index futures contract into the close is likely to be determined by trader reaction to the major Fibonacci level at 7022.25.
Avoiding another government shutdown should be positive for stocks and negative for the U.S. Dollar. The news would be a positive for U.S. economic growth which should underpin stock prices. During the recent 35-day partial closure, U.S. industry suffered losses, especially the airlines sector. U.S. GDP growth was also negatively affected. The dollar could weaken because hedgers would be encouraged to reduce some of their safe-haven positions.
The USD demand came back at the start of trade in London: the EURUSD pair has dropped to the lowest mark of the trading spectrum since November returning to 1.1300.
Based on the early price action, the direction of the March E-mini NASDAQ-100 Index the rest of the session is likely to be determined by trader reaction to 6939.75 and 6963.25.
The main trend is down according to the weekly swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom the week-ending December 28. A trade through 7169.00 will change the main trend to up.
The stock market hit resistance and profit-taking ensued after the European Commission cut its forecasts. Investors began to trim exposure to risk and seek shelter in safe-haven assets as news hit the market that the U.S and China were still far apart in negotiations despite recent optimistic comments from President Trump. Selling pressure increased after it was reported that Trump will not be meeting with China’s President Xi before the March 2 deadline.
A close under 6877.75 will form a potentially bearish closing price reversal top on the weekly chart. If confirmed next week, this could trigger the start of a 2 to 3 week counter-trend break.
Renewed trade fears weigh on global indices, US market indicated to open lower amid a flurry of earnings reports.
The issue over when the meeting will take place and if a deal can be reached in a timely manner is important because of the negative effect the trade dispute between the U.S. and China is having on global economic growth. Needless to say, the longer the trade dispute goes on, the more weakness we can expect in the global economy. Crude oil demand is likely to be especially impacted by the delay.
Earlier today, sellers took out yesterday’s low at 6972.25. This confirmed the closing price reversal top and set in motion today’s steep decline. This move often leads to a minimum 2 to 3 day correction.
Shares of Twitter were moving lower in early trading which added to the general aura of negativity in the market today.
Strong earnings have been carrying the markets higher for about two weeks, but mixed results on Wednesday gave investors an excuse to book profits. The stock market appears to be vulnerable at this time so prices could retreat further if more companies continue to miss the mark on earnings.
Based on the early price action, the direction of the March E-mini NASDAQ-100 Index the rest of the session is likely to be determined by trader reaction to the major Fibonacci level at 7022.25.
If Trump talks about optimistically about a U.S.-China trade deal, for example, shares of Caterpillar and Apple could rise. Other topics include infrastructure spending and lower pharmaceutical prices, which could have an impact on materials and engineering firms as well as drug companies.