Forecast and levels for S&P 500 - page 29

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Mitigating concerns about a possible trade war favored the US market earlier this week. Microsoft was up about 6 percent after Morgan Stanley raised its target price for the company, noting that the software company's market capitalization reach $ 1 billion with the growing adoption by cloud customers, as well as improved margins.
 
The performance of the yields is relevant, since in the last two weeks, together with the specter of a trade war between the US and China, has explained the fragility of the European banking sector.
 
In European opening, stocks are trading lower, influenced by the reversal of the US market trend in yesterday's session. The technology sector should be the focus of attention, since in Wall Street it was the main reason for the downward behavior of the market. Rise concerns about tighter control in this industry, following the news about Facebook. Other companies to attract attention should be the mining companies, after the negative behavior of the sector in Asian markets.
 
The recent risk aversion of investors has manifested itself through the purchase of bonds, which has led yields to retreat sharply. This move has led many fund managers to buy utilities and sell bank shares (more related to business cycles and a positive correlation with interest rates. In fact, as of 15 March, DJ Stoxx Utilities has appreciated 2.13% vs. DJ Stoxx Banks' 3.96% decline Now, from a technical point of view, as the yield drop reached extreme levels and with German yields testing the 0.50% support, they increase the likelihood of a recovery in yields. sovereign interest rates, ie a devaluation of State bonds.
 
The close of the session on the last business day of the week was positive for European stock exchanges and for most sectors in a week marked by the easing of tensions between the US and its trading partners but also by the selling pressure that plagued the technology sector . The automakers were among the best performers, influenced by the good performance of Renault, fruit of the news of a possible merger with Nissan. The technological companies, which in recent days have been in the spotlight, presented a gain around 0.50%. Also noteworthy for producers of raw materials that recovered from the losses recorded in the session on Wednesday.
 
One of my favorite quotes from Paul Tudor Jones:
“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”
 
Shares of Tesla's fell as much as 6% after its founder, Elon Musk, said that the company had gone bankrupt (making light of the car maker's troubles in April 1 Twitter prank). 
 

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Press review

Sergey Golubev, 2018.04.04 09:46

S&P 500 - daily price is bearing 200-SMA to below (based on the article)

S&P 500

  • "The drop below the 200-day moving average (MA) of the S&P 500 Monday received plenty of attention across financial television networks yesterday. Though it is an interesting measure of the market it can lead you astray if it is not combined with other measures of the market's health."

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Chart was made on MT5 with standard indicators of Metatrader 5 as well as the following indicator from CodeBase:


 
China has announced additional tariffs on more than 106 products imported from the US, less than twenty-four hours after President Trump presented a list of Chinese products to which he proposes to apply aggravated customs duties (about 1300 products from different sectors such as aeronautics, information and communication technologies or even robotics and machines). The number of products is lower than the list of 1300 goods presented by the US, but its value is intended to be identical, that is, 50,000 M.USD. Recalling that China had already promised to retaliate with the “same force” to the announced intention of the US to increase its customs duties on Chinese products. These news had a negative impact on several sectors of activity, but more strongly on technology companies.
 
Markets are increasingly beginning to interpret the actions of the President not as a final goal, but as a means of reaching an agreement with China in favor of the US. It is important to remember that Donald Trump was an author of a bestseller entitled “The Art of Negotiating” where he advocates strategies very similar to those adopted as President. In this context of tension between the US and China, the best market barometer is the DAX index. The German index is the one with a greater weight of exporting companies and Germany is the European country with the largest exposure to the Chinese economy.
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