S&P 500 Contract Edges Closer To Technical Support Ahead Of Cash Open

S&P 500 e-minis extend on Friday’s weakness early this week, although operate off worst levels as we move towards the NY cash open, last -0.1%. The DJIA contract is little changed, while the NASDAQ 100 contract is 0.2% worse off.

• Technically, a bear cycle in the S&P 500 e-mini remains in play. Friday’s strong sell-off reinforces this theme and suggests the recent shallow correction higher is over. Key short-term support has been defined at 4,483.25, the Sep 7 low. A break of that level would be seen as a bearish development and open 4,397.75, the Aug 18 low and a bear trigger. For bulls, a resumption of gains would instead open 4,597.50, the Sep 1 high.
• A fresh ’23 high for crude oil futures is probably providing some shelter for bulls, although a partially related move higher in Tsy yields provides some (modest) counter.
• Weakness in benchmark European indices has also applied some pressure.
• The impact of ongoing UAW strikes will be eyed, talks have been described as “slow” by the UAW chief.