XJO to fall as US markets continue bearish move

The XJO is expected to open lower this morning following a volatile night of trading in the U.S which saw their market retake almost half of the early session’s losses into the close.

We should open near 7,200 support this morning. Whether we break through that support or not will likely come down to how U.S futures trade today. At this stage their futures have edged into the red.

Beyond 7,200, the next clear support is 7,100. If we can hold around here, then expect a tentative move back towards 7,250 and roughly where the key MAs have converged.

US Markets

US shares closed lower overnight, with each of the three major indices finishing in the red. There wasn’t a whole lot of news for US markets, so instead they continued the bearish momentum from their Tuesday session. US markets have actually enjoyed a pretty good 2023 so far, but this is in the face of persistently high inflation and rising global economic problems; so there is a chance that US markets see a notable pullback late this year. Overnight we did see mixed US PMI numbers, which didn’t tell investors too much about the shape of the US economy. Tonight we will see US jobless claims as well as labor costs, which will both be relevant data points in the likelihood of more rate rises moving forwards.

Nine of the eleven sector groups of the SP500 closed lower overnight, with Technology stocks the worst performers, followed by Discretionary stocks. Utilities and Energy were the only stocks to close higher on average.

Technically, the SP500 is falling from the resistance at 4,525, and overnight it returned to the support levels at 4,450, which it bounced off. Should this level break, we will likely see a move back to 4,350. However, should it rise through the recent resistance at 4,525, the next level to the upside would be 4,600.

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