2019-11-11 • Updated
Yesterday the benchmark US S&P 500 stock index hit its lowest level (2341.65) in five weeks. Guess, what was the main fundamental factor that caused this downfall? Your first answer will probably be – Mr. Trump said/did something. And you will be right. American shares slumped mostly on the concerns that Trump might not be able to push head his pro-growth policies. The lawmakers might show their unwillingness to accept his policy initiatives. The first test will be run on Trump’s plan to dismantle Obamacare. Healthcare reform act is running into troubles. It takes too much time to push it through. It’s a sort of a signal for investors that Trump’s tax reform policies may face setbacks.
Another fundamental reason for this drop is dipping oil prices. There is a positive correlation between crude oil prices and some equities. WTI crude oil futures has fallen nearly 12-13% in March bringing them at around $48 level. Brent oil futures touched their lowest levels since November on the investor’s concerns over non-compliance of several OPEC, non-OPEC countries with their obligations under November output cut deal, increasing US oil stockpiles and boosting US oil industry.
In the near-term, stocks have all chance for recovery from their recent downfall thanks to lower yields in benchmark government bonds and 10-year Treasury notes (the yields were falling for 4 consecutive days to 2.37% from 2.62%). The latter ones will be less attractive for investors
What will happen with S&P 500 in the near-term/short-term future?
Let us refer to the technical chart to answer this question. The immediate support can be found at 2,328 (50-day MA). On the upside, there are several resistances located at 2,360/2,370 levels. In the short term, the equity prices will likely be consolidating within the range of 2,330-2,380 (yesterday’s high). A break of the higher level of the range will open the way towards resistance at 2,400 (March high).
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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