Global Market Wrap

Equity Futures: Dow +27.00. S&P +0.0. Nasdaq +5.50. Japan Nikkei +20.00. German Dax +12.00

U.S. Trade: U.S. stocks saw very low momentum in Tuesday trade, trading around the break-even line most of the time. However, the market moved into the green at the close, posting very small gains helped by the basic-materials companies. S&P futures had a range of only 8 points on the day, far below the average of the last few weeks of trading. This comes just after the market set a new yearly high, in Monday trade.

The market's hesitation to move was also seen earlier in the day during the Asian and European sessions, where the major indexes from the two regions closed in the red, on very small trading volume. This had a negative effect on S&P futures during the overnight session, and it was something that rolled into the U.S. open.

S&P Technical View: TheLFB Member Charts.

Daily chart trend: Long. Main price points: 1100-1120. Looking for: Wave 5 or C top.

The price structure on the daily chart is showing two valid scenarios. On the left side, it shows an impulse structure with five waves up from the 665 lows to the current highs. If this is the case, the wave 4 discussed on the weekly chart will be rejected, since the fourth wave is a corrective wave, which means it cannot be sub-divided by a five-wave move. However, in this scenario, a three-wave push lower into a corrective blue wave 2, with a target somewhere around 950 area, is expected.

On the right side of the chart, we have a different picture, with a clear zigzag correction, which is valid for a wave 4 scenario. In this case, lower blue wave 5 will follow.

Overall, the current price structure signals for a coming turning point around 1120 area with at least a three-wave push lower, since the market is trading around the top of wave 5 or wave C leg.

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Marco Hague is one of the founders and principals of The London Forex Broadsheet (commonly known as TheLFB), a global forex trader portal with headquarters in the U.S. Hague began his career with the Bank of England dealing with foreign exchange control, and he has been trading for the last three decades. He has been involved with institutional risk asset ratio analysis and the implementation and maintenance of institutional trade desks globally.