Over the last few years investors have consistently felt confident enough to buy the dip when it comes to stock market sell-offs. For some reason in the last few weeks this confidence appears to have been somewhat lacking. The big question now is whether we are likely to see further weakness in equity markets, or whether we could see a rebound. In the US on Tuesday, Wall Street ended lower with the Dow plunging 550 points over a batch of weak corporate earnings reports. Trading today may be impacted by reaction to a few economic data, including reports on durable goods orders, weekly jobless claims, and existing home sales.
From a technical standpoint, the omens don't look good with recent attempts at rebounds failing miserably and any likely catalysts for a decent rebound hard to find. Prices yesterday broke below the key technical support level at 25000 which is likely to act as resistance going forward. Further selling might move prices lower should the market test October's nearby low at 24122. For now however, the RSI on the 4H chart looks bullish, and the index has rebounded off the S2 support level at 24355 which is a positive indicator and an optimal condition for long-side swing traders.
Support: 24355 / 24355
Resistance: 25000 / 25275