Bearish Theme in Eurostoxx 50 Futures Remains in Play

A bearish theme in Eurostoxx 50 futures remains in play and last week’s reversal from 4256.00, the Oct 12 high, signals the end of the recent corrective cycle. Note too that resistance at the 50-day EMA, at 4253.10, remains intact. A clear break of this average is required to signal scope for a stronger correction. The bear trigger lies at 4082.00, the Oct 4 low. Clearance of this level would confirm a resumption of the downtrend. S&P E-Minis found resistance last week at 4430.50 (Oct 12 high). The pullback means that - for now - resistance at the 50-day EMA, at 4427.45, remains intact. A clear breach of this average is required to strengthen bullish conditions and this would open 4496.25, trendline resistance drawn from the Jul 27 high. A deeper pullback would refocus attention on 4235.50, the Oct 4 low and bear trigger.

• Japan's NIKKEI closed lower by 656.96 pts or -2.03% at 31659.03 and the TOPIX ended 35.21 pts lower or -1.53% at 2273.54.
• Elsewhere, in China the SHANGHAI closed lower by 14.286 pts or -0.46% at 3073.813 and the HANG SENG ended 173.09 pts lower or -0.97% at 17640.36.
• Across Europe, Germany's DAX trades lower by 18.95 pts or -0.12% at 15167.53, FTSE 100 higher by 2.17 pts or +0.03% at 7601.75, CAC 40 down 13.36 pts or -0.19% at 6990.17 and Euro Stoxx 50 down 7.04 pts or -0.17% at 4129.08.
• Dow Jones mini up 87 pts or +0.26% at 33914, S&P 500 mini up 7.25 pts or +0.17% at 4364.5, NASDAQ mini up 11.25 pts or +0.07% at 15131.