Glimmer of hope
Donald Trump is wielding both the sword and the olive branch. After threatening Iran with an “attack greater than ever” midway through last week, the US president finally seems ready to walk the path of de-escalation.
The upshot: oil is falling, inflation forecasts are cooling, the case for rapid rate hikes is fading, and stock indices are soaring back.
Unfortunately, while it’s genuinely good news that Trump, politically weakened heading into the midterms, chose to reverse course rather than double down, investors’ overflowing enthusiasm about it doesn’t bode well.
With a packed week ahead, featuring a Fed meeting and quarterly results from several Tech giants, caution is the order of the day. Running on empty, this morning’s fanfare rally may not last long.
My trading plan
Riding a favorable news flow, buyers rushed to buy back the market at the monthly pivot point, pushing prices back toward resistance at 52,721 points with an eye on the next resistance at 53,114 points [1].
But the lack of panic on Thursday’s decline and today’s excess enthusiasm, marked by a bullish gap, leave me skeptical about how long this upward move can hold.
Against that backdrop, I’ll keep favoring bearish trades, targeting the buyers’ stop-losses sitting below support at 51,692 points.
Happy trading!
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
Chasing the top
Chasing the top
Not even scared