Its Tuesday 21st of January and on Monday the 20th US Markets were closed due to the Martin Luther King Day. Markets are pulling back to the technical levels on lower volume. Europe is lower with FTSE leading the drop and Asia is dragged by Hang Seng. By the time this report was written we also see a pullback in the US Futures as well. It’s the second day of Davos Economic Forum and we are starting to see more important earnings releases later this week. The economic calendar has more to affect Europe this week.
US Market Comments:
S&P Futures Have tested gradually two support zones noted on Friday. Currently we are holding the red channel along with a more important support at 3300 area. Please note the combination of support areas near 3300 as being very strong. A quick test of this area with a buying reaction will help the market hold into the next move, otherwise its hard to have a plan at the moment. Netflix reports after the market close and will definitely will affect the technology sector.
FTSE did not hold the breakout area and made a pullback on Monday followed by a drop today. As noted on Friday we had to stay on the descending line. Currently there is no technical setup that will help us assess the situation with a more clear view. The Davos summit can trigger some news that can affect European markets in both directions.
DAX has gapped down considerably today but moved quickly higher. We see a good bull power on these levels. I would consider intra-day longs if I had to trade Europe. Local supports around 13470ish and resistance at 13560.
GC (Gold futures) rejected the previous highs at 1566.2 but still looks ok. If you have positions from the buy area noted in green maybe its time to place stops at breakeven for at least half of the size. Current US open might help gold decide its direction.
CL (Crude Light Sweet) as we didn’t hold the supports and the US markets were closed on Monday, today we have to see if local pivots will hold or we go lower to test the 56.00-56.50 area. Current range is between 57.45 and 59.07. Note that 50sma was rejected yesterday but currently the price is near the 200sma.
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