The XJO is expected to open higher this morning following a bullish night in the U.S which saw their market return near their all-time highs. Their futures are flat this morning.

Yesterday we managed to retake about a third of our opening losses, to settled on the key support at about 7,350. We are set to bounce from that key support, opening near 7,420. This will also show that we have rebounded from the uptrend line, and continue to trade in the pennant.

Roughly 7,450 is the next key level of resistance, and is roughly where the short-term countertrend line comes in. It seems unlikely that we break through today, or even Monday, unless the U.S can show commitment to making fresh highs.

US Markets

US shares closed firmly higher overnight, with each of the three major indices closing strongly in the green. The NASDAQ closed at an all-time high. Data continued to come in strong for US markets, with fewer than expected Jobless claims and better than expected construction data. Traders also continued to reduce bets on a March rate cut, though the odds for the cut are still above 50%. The resilience of US markets is kind of surprising, given that they have rallied on the hope of further rate cuts, but those rate cuts are now looking less likely. Still, with the Federal Reserve meeting at the end of the month comes risks of more hawkish positioning, which could lead markets lower.

Seven of the eleven sector groups of the SP500 closed higher overnight, with Technology, Communications and Industrials stocks closing higher. Utilities and Real Estate stocks saw the most selling.

Technically, the SP500 returned to close to the all-time high resistance level at 4,800 overnight. We will need to see 4,800 break before further selling looks likely. Should the index fall from here, we would need to see a break below 4,700 before we could expect a move to the next key level of 4,600.

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