SP500: Breaks Out Of Channel, Steps Into A Correction
SP500: Breaks Out Of Channel, Steps Into A Correction
I hope you had a nice weekend despite that nasty turn lower on stocks we saw on Friday. As you know, the move came after Trump threatened to impose new tariffs on China, following China’s own restrictions and tighter export controls on rare earth metals, which are crucial for the tech sector. We’ve seen this story before back in April, and if tariffs come back into focus again, traders will likely react with fear — so it’s not a surprise we saw such a strong drop in stocks on Friday.
Normally, markets are most sensitive when this kind of news first hits, and then they tend to stabilize afterward. What’s interesting, though, is that despite the strong sell-off in stocks, the dollar index didn’t show the kind of sharp upside reaction you’d usually expect (but its coming nicely up from a new low from our latest free update here) . So I’m wondering if stocks can find some support, but seems like this can be only wave B rally, since we are in the middle of wave four retracement. Keep in mind there is an open gap lower on futures.
Big supports is at 6400 and 6200.
BTW, I also recorded the week ahead video this weekend, where I covered also FX, Cryptos and metals. Click here
Grega
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