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US stock markets and metals dominated by the trade war

The financial markets have been increasingly dominated by the US-China trade war in recent weeks. We have seen periods of typical low summer volume punctuated with violent moves follow a news announcement from either side, or more likely a new tweet from Trump. Traders and investors are more likely to follow Trump’s Twitter account than financial news for important market-moving updates.

The US stock markets and precious metals have been offering the most volatile conditions and perhaps the best trading opportunities. Here’s my technical analysis outlook for these markets in the short term.

E-mini S&P 500 has made a good recovery into the end of the week as China made more positive noises on Thursday. We meet key resistance at 2936/38, while bulls need a move above the two-week high at 2943/44 for the next buy signal, initially targeting 2956/58. Above 2961 we look for 2969/60 then some congestion at 2975/80.

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Short positions at 2936/38 target minor support at 2920/18 and better support at 2913/11. Below here, try long positions at 2902/2900 with stops below 2895. A break lower is a sell signal targeting 2891/90 and support at 2884/80.

The Nasdaq 100 burst higher to our upper target of 7725/30 and topped exactly here. There is minor resistance at 7748/50 but if we continue higher the two-week high at 7783/89 is more of a challenge. Shorts need stops above 7800. A weekly/monthly close tonight above 7790 would be a buy signal targeting 7815, 7833/35 and 7865/68, perhaps as far as 7890/95 into next week.

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Holding yesterday’s high at 7725/30 targets minor support at 7680/76 then a buying opportunity at 7650/40, with stops below 7630. A break lower is a sell signal targeting 7620/17 and support at 7590/85.

E-mini Dow Jones is seeing a strong recovery as well of course to re-test two-week highs around 26400. Holding here risks a slide to minor support at 26310/300, then better support at 26250/240. Below 26200, however, look for 26140/130 then a buying opportunity at 26050/000, with stops below 25900.

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On further gains today, we should target 26460, 26500/510 and perhaps as far as 26555/565. If we continue higher into next week look for 26660/690.

Gold completed a one-year bull run gaining almost $400 to reach $1554 at the start of this week. However, we have traded sideways since Monday as we consolidate gains. This is quite a strong performance when you consider the strong recovery and ‘risk-on’ conditions in stock markets.

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Gold has key support at 1519/16 today on any weakness. Try long positions with stops below 1511. A break lower is a sell signal targeting 1510/09, 1505 and minor support at 1500. Failure here targets 1496, 1492 and 1487.

Holding key support at 1519/16 targets 1523, 1526 and 1529/30 with key resistance at 1536/38. A move above 1540 targets 1544/45, then 1548/49, before the high at 1554. A break higher targets 1561/64 and 1575. If we continue higher look for 1587/90.

Silver is playing catch-up with gold this week as we continue higher through to Thursday. We hit all targets as far as important resistance at the 2017 high of 1860/65 and topped exactly here. The strong negative reaction at this level in severely overbought conditions suggests the rally is over for now and we are likely to trade sideways-to-lower.

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The first support is at 1805/00 and we bottomed exactly here yesterday. Further losses target 1790/87, 1782 and 1777. Look for a buying opportunity at 1760/56 with stops below 1750.

There is minor resistance at 1823/25 but above here we target 1834/35, perhaps as far as 1840. Try shorts at 1855/65 with stops above 1875. We need a weekly close above here for bulls to regain control.

Jason Sen

Technical Analyst & Trader

For more information and trading education visit Intertrader

The content of this article is the personal opinion of the author and not Intertrader. You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.

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