Come hell or high water
Oil above $100 a barrel, the US 10-year yield over 5% and inflation above 3%… Market conditions are getting tougher, but as the tide rises (and everyone redoes their sums), will salvation once again come from US companies?
All eyes are on earnings season, which starts pouring in tomorrow with the first results from the banks (true barometers of the economy): Citigroup, Goldman Sachs and Wells Fargo.
But with annual growth forecast at +29.6%, S&P 500 earnings will have to deliver if they are not to disappoint the markets!
The pressure is all the greater because new inflation figures due this Wednesday could deal another heavy blow to stock indices.
Despite a timid +0.9% rebound last week (driven largely by Donald Trump’s comments on Russian diesel), the Dow Jones remains particularly vulnerable.
My trading plan
The underlying trend on Dow futures stays bearish, and the index could hand us another selling push toward the monthly Support 1 this week.
Firmly in control, short sellers managed to bank their profits at the symbolic 51,000-point mark and are letting the market bounce for now.
The buying momentum above the 52,965-point resistance looks fragile to me. So I’m lying in wait to sell the market when the time comes.
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.
Running out of steam
The vise tightens
Dead cat bounce