Biased A Little Higher Pre-NY, Bearish Technical Theme Remains Evident

Some stabilisation in U.S. Tsys and a positive lead from China (largely centred on capital flow news/speculation) lend support to e-minis in pre-NY cash trade after a torrid round of post-FOMC dealing.

• That leaves the 3 major e-mini contracts running 0.1-0.6% firmer, with the NASDAQ 100 leading.
• The USD has failed to improve on multi-month highs (in BBDXY terms), which will have also aided equities.
• On the negative side, increased risk of a U.S. government shutdown and a potential imminent ratcheting up of the UAW industrial action present some worry.
• Technically, a bear cycle in S&P 500 e-minis remains in play and this week’s break lower reinforces current conditions. Thursday’s sell-off has resulted in a break of support at 4,397.75, the Aug 18 low. The breach reinforces bearish conditions and signals scope for a continuation lower near-term. Sights are on 4,352.50, the Jun 8 low. Further out, scope is seen for a move to 4,318.00, the Jun 2 low. Initial firm resistance is 4,502.22, the 50-day EMA.