Monday, November 11, 2019



Fundamental Highlights

US indices closed higher on Friday with the Dow ending barely changed. President Trump casted doubt on the narrative that the US and China would roll back tariffs as part of their phase one deal. Separately on economic data, China’s exports and imports in US terms came in better than expected while its trade surplus widened to 42.8 billion. Meanwhile US Michigan consumer sentiment figures came in mixed. Today there are no major US economic releases and influence will remain to trade headlines. While markets are cautiously optimistic that a US-China phase one deal would pass, the timing remains indefinite and the extended rally on US indices suggests an imminent pullback.

Technical Analysis

On Friday, the Dow retreated from its all-time high at 27742 to reach the support at 27545 near the 20-period MA before closing 7 points higher at 27681. Today, Dow futures are pointing lower and a sustained move below 27545 would be required to signal a retracement from the wider rally triggered at the start of November and target the support at 27370 near the 50-period MA. Holding above 27545 would lead the Dow to bounce off of the 20-period MA to re-test the high at 27742.

Support: 27480/ 27370
Resistance: 27742/

Chart (H4)