US open: Will stocks continue yesterday’s selloff?

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Joe Perry
By :  ,  US Market Analyst

US Futures

Dow Futures +0.4% at 33,981

S&P Futures  +16.50 at 4,268

Nasdaq Futures +64.50 at 14,605

In Europe

FTSE -0.05% at 6,843

Dax -0.12% at 15,123

Stocks trying to recover after yesterday’s pullback

The S&P 500 are pointing to a cautiously higher start after yesterday’s loss of over 1.5%.  Major stock indices are up nearly 0.5% as traders look to buy the dip after coronavirus resurgence fears gripped the markets.  The German Dax lost nearly 2.5% yesterday and is up only 0.25% today.  In addition,  the UK FTSE 100 lost 2% yesterday and is only up 0.2%. 

In addition to the coronavirus fears,  US President Joe Biden accused China as being an agent in worldwide cyber-attacks.  He said the Chinese government acted either directly or as a sponsor of attacks originating in China.  He specifically called out a recent hack on Microsoft Exchange.

Markets will at also be waiting for the first of the FAANG earnings to be released after the close, Netflix!  Estimates for EPS are $3.15.  Traders will also be focused on the guidance to see if they believe the Fed will be tapering soon!

What’s next for the S&P 500?

After yesterday’s breakdown below the bottom trendline of the rising wedge, stocks will try to retest those bottom trendline on the wedge near 4320.  Price held support at 4233, yesterday, but the major index breaks below, support doesn’t come into play until the June 21st lows of 4126.75!

Market chart showing performance of ES daily. Published July 2021 by FOREX.com

Source: Tradingview, FOREX.com

FX- US Dollar continues to push higher

The DXY pushed through significant horizontal and trendline resistance yesterday near 92.83 as it filled the gap from April 5th.  The next resistance level is at the highs of March 31st, near 93.43.  Support is the horizontal support level of 92.85. Notice the RSI is diverging with price, an indication price may be ready for a pullback.

Market chart showing performance of DXY. Published July 2021 by FOREX.com

Source: Tradingview, FOREX.com

GBP/USD  -0.72% at 1.3576

EUR/USD -0.30% at 1.1762

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Oil continues lower

After losing 7.5% yesterday, WTI crude continues to move lower as OPEC+ agreed to increase production by 400,000 bpd through September 2022 and worries of lower demand due to the coronavirus resurgence. 

US WTI trades  -0.45% at 66.10

Brent trades  -0.48% at 68.05

Looking Ahead

After close - NFLX earnings

4:30pm ET API Crude Oil Stock Change

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