Recent Recovery in Eurostoxx 50 Futures Deemed Corrective

Eurostoxx 50 futures trend conditions remain bearish, with Friday’s rally and the follow through early this week deemed corrective in nature. The contract has traded below 4128.00, the Sep 27 low. This confirms a resumption of the downtrend that started late July and signals scope for a move towards 4055.40, a Fibonacci retracement point. Initial firm resistance is at 4270.80, the 50-day EMA. A break of this average would signal a possible short-term base. A bear cycle in S&P E-minis remains in play, despite Friday’s sharp corrective rally and the follow through this morning. The contract traded lower last Wednesday, confirming a resumption of the bear leg once again. This maintains the price sequence of lower lows and lower highs and signals scope for weakness towards 4194.75, the May 24 low. Pivot resistance is 4441.61, the 50-day EMA.

• Japan's NIKKEI closed higher by 189.98 pts or +0.6% at 31936.51 and the TOPIX ended 4.35 pts lower or -0.19% at 2307.84.
• Elsewhere, in China the SHANGHAI closed higher by 3.72 pts or +0.12% at 3078.956 and the HANG SENG ended 228.37 pts higher or +1.29% at 17893.1.
• Across Europe, Germany's DAX trades lower by 14.18 pts or -0.09% at 15404.72, FTSE 100 higher by 8.69 pts or +0.11% at 7635.84, CAC 40 down 48.88 pts or -0.68% at 7109.23 and Euro Stoxx 50 down 19.5 pts or -0.46% at 4183.28.
• Dow Jones mini up 28 pts or +0.08% at 33970, S&P 500 mini up 4.75 pts or +0.11% at 4397, NASDAQ mini up 24.5 pts or +0.16% at 15299.