Dec 18, 2014, (9:32AM EST)
update: Going by 5-hourly chart of Dow Jones, this index has major resistance at 17,590 and major support at 17,420. So, that makes the day’s trading range for this index.
Some hours ago, just when U.S. and European stock futures had started turning negative, Switzerland’s central bank announced a rate cut into the negative zone and global markets rallied on this new liquidity dose.
Dow Jones is expected to open near 17,500 level, which may or may not provide resistance to the index. Markets were looking for an excuse to take a breather or stage a technical bounce or rally before Christmas and the negative rates from Switzerland have provided that opportunity.
Any technical bounce usually lasts for 3 sessions. Today will be the second session after yesterday’s rally in U.S. markets. So, we will either see a narrow, small range bound session in U.S. market just like European markets. Or, markets will close lower than their opening levels. Please remember, lower than their opening levels, not completely lower in the negative.
If no big move happens in U.S. markets today, then we can only wait for some bigger trading moves tomorrow, in the third session of this bounce back.
I’ll watch 17,500 level for Dow Jones to see if this bounce back will provide enough support to the index to go back to previous highs. You can trade in whatever way you want
Good luck, enjoy the session, have a great day in markets today!
See you later.