Forecast and levels for S&P 500 - page 11

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In the pre-opening, the European indices traded with contained variations. Although the sentiment is relatively neutral, signals from the debt market are somewhat worrisome. German bond yields were trading above 0.60%, prolonging the rise initiated after the break of the 0.50% technical barrier. Now, institutional investors are carefully monitoring Italian 10-year yields, which trade today at 2.29%.

 

The effects of Janet Yellen’s words continued until the opening of the European session, which was moderately positive. If European equities could continue to benefit from the greater risk appetite of investors, this effect seems to have faded in the debt market. Following yesterday’s intervention by Janet Yellen, European bond yields, as well as their US counterparts, fell back. However, a part of this retreat was lost in the first minutes of today’s session. While German yields remain at levels above 0.50%, investors will continue to monitor, with concern, the behavior of interest rates in Europe.

 

In the pre-opening, the indices of the Old Continent did not show a definite trend. Today's session should be divided into two parts. The first, in the morning, should be characterized by some tranquility with investors following the trend of state yields. The second part of the session will begin with the publication of the results of US banks and the spread of inflation in the US. The latter figure is expected to have an impact on European yields and consequently on the stocks of the Old Continent. Debt markets are highly interdependent, so an increase in yields in the US (if the consumer price index indicates higher inflation) will have an impact on European debt interest rates, which in turn will have an impact stocks in this region. The evolution of yields, more precisely, the differential between US and European interest rates, has been one of the variables that has conditioned the Euro / Dollar exchange rate. In recent weeks, the Euro has appreciated not only against the Dollar, which began to weigh on the European export sector. Today, it was reported that sales in Europe grew only 2.10% in June (compared to June 2016). The country with the highest growth was Italy, which contrasts with the falls in Germany and the United Kingdom. In the latter country, uncertainty over Brexit and the devaluation of Libra (which makes imported vehicles more expensive) has inhibited buyers. The strongest brands were Toyota (+ 13% of sales) and Fiat (+ 7.90%).

 

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Sergey Golubev, 2017.07.14 19:22

S&P 500 - Intra-day bullish breakout (based on the article)

H4 price is on bullish breakout by ascending triangle pattern to be breaking to above together with 2,456.94 resistance level to be testing for the bullish trend to be continuing.


  • "There is no denying the longer-term trend is firmly higher, and finding ‘the’ top is not an exercise we are interested in partaking in. But even with that said, we could soon see another turn lower that offers shorter-term-minded traders an opportunity to take advantage of price weakness. The S&P is on approach to record highs at 2454. If we see a rejection around that level it could signal a move back towards 2405, continuing a range-trading environment, with an opportunity for shorts. If a move lower develops towards 2405 we would then become cautious on bearish bets and watch how the market responds to this important support level (it could also be in confluence with the December slope). There might be a long-trade in there as the range remains and buyers continue to keep the market propped up."
  • "If, however, we were to see the 2405 level break, then it could be game-on for the bears, as we receive confirmation of the double-top. But not to get ahead of ourselves, we’ll first focus on the resistance level quickly approaching and go from there. If the S&P can gain traction through the record high on a daily closing basis, then the continued range scenario would be undermined. However, it wouldn’t necessarily be a sign that it is time to ‘get all bulled up’, as buying breakouts in equities has long had a history of burning those who paid up for new highs. Furthermore, there is a top-side trend-line extending from the March 1 high over the June high, as well as the under-side of a slope rising up from the November low. This could put a lid on the market, even if for just a short while."

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All the charts were made using Metatrader 5 with Brainwashing trading system:

Brainwashing system/AscTrend system (MT5) - the thread


 

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Sergey Golubev, 2017.07.16 11:00

Weekly Fundamental Forecast for S&P 500 (based on the article)


S&P 500 - "The market moved to a new record close on Friday. How do we trade a market which just broke out to new all-time highs? Chasing isn’t advisable, and especially not when there is resistance just ahead. The bottom-side of the November slope will quickly come into play, and is also in near confluence with a trend-line extending over from the March 1 high across the prior record high set in June. We’re only looking at 7 or so handles from Friday’s close before we are there. If the market can hold above the prior record high and not trade back below Friday’s low then it will be postured for higher prices, but may at first struggle to print new levels with the beforementioned lines standing in the way."


 

In the pre-opening, the European indices traded with some gains. In an early stage, the good performance of Wall Street should boost European markets. However, this momentum should be limited by the strength of the Euro. At a time when the Euro appreciates sharply against the US dollar, European markets tend to underperformance with their US counterparts. Despite the dynamism of domestic consumption and investment, European companies continue to have high exposure to external markets. In these economies, many of them going through a less dynamic phase (such as China and on a larger scale to Brazil), the companies of the Old Continent face strong competition from American and Asian companies. The strength of the Euro exacerbates the competitiveness of these companies and also decreases the value of revenues and profits generated there.

 

European markets closed lower due to the behavior of the Euro against the Dollar and some business results. In fact, the Euro reached the maximum since May 2016 against the US Dollar, which harmed the European export sector, such as industrial companies and car manufacturers.

 

In the pre-opening, the European indices traded with modest gains. Under normal conditions, the good performance of the Nasdaq would be enough to drive European markets more decisively, but at the present stage the strength of the Euro represents a permanent obstacle to the Stocks of the Old Continent. Yesterday, the common currency approached 1.16, penalizing European markets and especially German, which historically has a greater correlation with the European currency due to the weight of the export sector in the index. Investors will now monitor the ECB's meeting tomorrow and the long-term resistance of the Euro / Dollar exchange formed by the 1.16 / 1.1616 zone.

 

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Sergey Golubev, 2017.07.21 10:13

S&P 500 - intra-day bullish breakout; 2,476 is the key (based on the article)

H4 intra-day price was bounced from Senlou Span line of Ichimoku indicator to above for the bullish area of the chart. The price is on testing with resistance level at 2,476 for the bullish trend to be continuing.


  • "Yesterday’s move higher showed not only good buying interest, but was also enough to push the S&P beyond the first line of resistance we had marked in by way of the March top-side trend-line. No issues at all pushing on through. We’ll look to see how the market responds to it on any dip which may unfold from here. The move higher now brings the underside of the November slope into play. As stated the other day, both of these overhead lines given they are running with the direction of the prevailing trend, are not viewed as the most steadfast forms of resistance. But potential resistance, nevertheless. With that said, if the market is ready to launch higher in a similar fashion as it did during February we may see the S&P tear through the November slope with relative ease."
  • "But again, to reiterate, not a big fan on this end of paying up into momentum; choosing, rather, to buy on dips. This means those traders looking to get long may have to be nimble and establish positions on intra-day dips and single-day declines (Keep in mind the March top-side trend-line as first potential support.) Overall, risk reward at this moment is not the most compelling."

 

European markets ended on a downward trajectory, due to the continued appreciation of the Euro and some business results that disappointed the market. The Euro appreciated about 0.20% against the Dollar, a day after Mario Draghi alluded to expectations regarding inflation and the potential end of the asset program. In fact, Mario Draghi pointed to the existence of plans to begin the discussion regarding the gradual reduction of the program of quantitative easing already next autumn. In terms of business, the car sector was among the worst performers, given some published results. On a counter-cycle was Vodafone which advanced 0.85%. The British operator reported quarterly revenues of € 10300 M. (2.20% over the same quarter of 2016), which exceeded analysts’ estimates.

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