EQUITIES: Modest Weakness In ES1 Doesn't Look Headline Driven
A quick 0.3% pullback in US equity futures is noted, but Emini is already moving away from those session lows. There wasn't an obvious headline trigger for the move, and weak volumes behind the selloff supports the view that it wasn't news-related (see chart).
Our technical analyst notes that initial support in Eminis is 6807.02, the 20-day EMA. A bull cycle remains intact.
FIgure 1: ESA Index Price and Volume (Source Bloomberg Finance L.P)
Separately, the WSJ reports that "U.S. manufacturers are pulling back harder on orders of parts and raw materials because of rising uncertainty around the future of the Trump administration's signature tariffs, a new survey shows".
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OUTLOOK: Price Signal Summary - Key Support In EUROSTOXX50 Futures Intact
- In the equity space, the trend condition in S&P E-Minis remains bullish and the pullback since the Oct 30 high appears corrective. The contract has managed to find support below the 50-day EMA, currently at 6710.28 and a key support. Friday’s activity also highlights a potential reversal signal - a bullish doji candle. This defines key support at 6655.50, the Oct 7 low. A continuation higher would signal the end of a correction and open 6953.75, Oct 30 high and bull trigger.
- A medium-term bull trend in EUROSTOXX 50 futures remains intact and recent weakness is considered corrective. Price has managed to find support below two important price points; the 50-day EMA, at 5576.77, and 5571.50, the base of a bull channel drawn from the Aug 1 low. A clear break of both levels would strengthen a bear theme and highlight a stronger reversal. The bull trigger is 5742.00, the Oct 29 high.
