
US stock markets started falling, while the US dollar is rising. What to expect from
Bloomberg says yesterday’s movement was so far the wildest. It was the first time in history for the US500 to crash by 2% and close the day 2.8% above the neutral line. There’re several possible reasons for the move. First is an enormous amount of PUT options (an option that profits when an asset falls). Even a slightly good reading may cause a squeeze when most traders are shorting.
The second possible reason is good expectations for the upcoming earnings season. Today, Citigroup, Wells Fargo, and JP Morgan will release their earnings before the market open. Banks usually benefit from high inflation. However, the housing market is under pressure, raising concerns about banks’ revenue expectations.
The US500 chart looks great for short-term traders. On the M15 timeframe, we can look for a reaction on the support area and a bounce to the 50-period MA. After that, we expect a decrease because many traders bought the index yesterday and will try to close part of their orders before the weekend.
US500 M15 chart
Resistance: 3680, 3700
Support: 3640
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US stock markets started falling, while the US dollar is rising. What to expect from
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