The XJO is expected to open higher this morning following a continued move higher in the U.S overnight. Their futures are flat.
Yesterday we retraced from our lows, bolstered by positive U.S futures during our session to, finish marginally in the green. This morning we will continue that strength and open near 8,025, and if U.S futures move positive, it seems likely we test resistance near 8,050.
Though the U.S paused, their renewed strength overnight signals further gains, and we are likely to follow suit – despite both markets looking well overbought in the short-term. Beyond 8,050 is the next key level of 8,100 which represents roughly our all-time highs.
US shares closed higher overnight after a back-and-forth session, with little strong movement. Overnight the US Fed meeting minutes were released from the July meeting, which practically confirms a 25 basis point rate cut in September. This week is all about the Federal Reserve, with speeches, meeting minutes, and their Jackson Hole symposium. However, tonight will likely be more about jobless claims and PMI data. Markets will want to be sure that the data is not looking recessionary, but not strong enough to disrupt the long-awaited rate cuts.
Nine of the eleven sector groups of the SP500 closed higher overnight, with Discretionary, Materials, and Utilities stocks the strongest performers. Energy and Financials were the only sectors to close (very slightly) lower.
Technically, the SP500 broke above the previous peak at 5,550 on Monday night but prices stalled overnight. Overall, the move now suggests a rise towards the all-time high peak at 5,670, which is now only one percent away. Should the index break through that level, it would indicate further upside. However, Should the index fall from here, we would have to look for a double top pattern forming which could be a reversal sign. Tonight’s move and whether the index breaks higher or lower will be extremely important.
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