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S&P 500: HOW SOLID IS THIS FLOOR (0915 EDT/1315 GMT)
The S&P 500 mounted an impressive snapback from its low last week. Indeed, the index formed a hammer candle pattern on the weekly chart suggesting a strong floor at 2,822.12. (Click on chart below)
Indeed, a hammer is considered a bullish reversal pattern and it suggests, at a minimum, the SPX can be poised to see a greater recovery off last week's lows. However, at least initially, that is not going to be the case with premarket futures EScv1 suggesting the SPX is set to drop about 15 points at the open.
Nevertheless, in the wake of a modest orderly decline, the SPX can stabilize and push higher. That said, it will still have to contend with a number of Fibonacci retracement hurdles. These include the 61.8% retracement level of the July/August decline (at 2,949.34), and the 76.4%/78.6% retracement zone (at 2,979.40/2,983.93).
Additionally, even if the SPX can close above 2,983.93 and then challenge its 3,027.98 record high, it will still face a major barrier at what may be the upper boundary of a large expanding triangle pattern that carries bearish implications.
Breaking hourly support at 2,884.40, amid intensifying pressure, can add credence to the view that last week's recovery was just a sharp counter-trend bounce. Violating the hammer candle low (2,822.12) would potentially be an especially negative development.
U.S. equity index futures are pointing to a lower open on Monday. This as simmering trade tensions and global growth worries are once again front and center. .N
A report from Germany's Ifo institute is the latest economic survey to add credence to the notion that the economic outlook has deteriorated worldwide as the trade dispute between the United States and China escalates.
Add in additional concerns over protests in Hong Kong, and last week's snap backs in the major averages are at risk of quickly petering out.
Chip stocks are poised to take a hit at the open. Volume is light, but the iShares Philadelphia Semiconductor ETF is quoted down more than 1%.
Here is your premarket snapshot: