US Markets
- S&P 500 -13 points
- US 10-Year – 2.64%
- Oil $55.68 -$0.98
- VIX 17.36
- Dollar Index 97.47
International Markets
- China Shanghai -4.4%
- Hong Kong Shanghai -1.91%
- Japan Nikkei -2.01%
- South Korea KOSPI -1.3%
- Australia ASX – 0.96%
- German DAX -0.67%
- UK FTSE -0.97%
Key Events
- US Nonfarm Payroll
- US Unemployment rate
- China Exports plunge 20% in February
International Trading
China
The big news overnight is that Chinese exports fell 20% versus a year ago for February. That lead to a steep drop in the Shanghai Composite overnight. So while a 4.4% drop is steep, we should also remember this is China, and it is a volatile market. The pullback isn’t all that surprising, as we noted the other day how the index was looking overbought and was due for a pullback.
It would seem possible that there is still some more downside to this index to at least 2,920 and perhaps as much as 2,825.
South Korea
South Korea continues to look very weak, and we have talked about how this index has me greatly concerned. It has now fallen to a critical support level at 2,136, that absolutely must hold for a variety of reasons. The first being the peak in the middle of the double bottom. Secondly, the RSI which had appeared to have broken out is now on the verge of breaking down.
While neither of these two indexes is in danger falling to their December lows, they would at the very least suggest there is more downside risk at this point to equity prices than upside potential over the short-term.
S&P 500 (SPY (NYSE:SPY))
With that, we turn our attention to the S&P 500, which is sitting just above a massive level of support at 2,735. A drop below that level quickly sends the index back to roughly 2715.
Russell 2000
Although it doesn’t sound great to hear this, there is the genuine chance the Russell could fall back to around 1456, from its current 1523, about a 50% retracement from the December low to the recent highs. For all of you that believe in Fibonacci and the golden ratio, the Russell would need to see a retracement of 61.8% before turning higher, which happens to confidence with support at roughly 1,396.
IQ
Anyway, I think someone, somewhere, on social media, said there was no way IQ could fall back to around $24 this week. Well, while it may not hit $24, it indeed is running lower to $25 and butting up against that trend line I had noted when I picked that $24.