Pre-Market Analysis and Chartbook: Selloff Deepens in Risk Assets

Monday Market Snapshot

S&P 500 2,889 -0.17%
DAX 30 11,995 -0.97%
WTI Crude Oil 74,20 -0.13%
GOLD 1,191 -1.18%
Bitcoin 6,601 0.37%
EUR/USD 1.1482 -0.32%

Global stocks are deep in the red today, due to last week’s bearish shift in the major US indices and today’s negative news flow. The EU rejected the latest Italian budget proposal, and that put European assets under pressure, with investors focusing on Italian bonds and the common currency.

Last week’s rally in Treasury yields paused so far today, and that might help a bounce during the US session, with the Treasury rout triggering the US selloff in the first place last week.

DAX 30 Index CFD, 4-Hour Chart Analysis

The DAX dipped below the key 12,000 level today after resuming the dominant declining short-term trend last week. The other major European benchmarks are also sporting significant losses compared to their recent swing highs, despite a period of stability, and this week, the August lows could be in danger, should the risk-off sentiment persist.

With no key economic releases coming out today, all eyes are on the Italian situation besides the rate-conundrum and of course, emerging markets.

Shanghai Composite Index CFD, 4-Hour Chart Analysis

Chinese markets reopened after the Golden Week on a decisively negative note even after the emergency monetary easing by the People’s Bank of China. The Shanghai Composite headed lower today, since the US-Canadian-Mexican trade deal will likely lead to an all-out trade war by the Trump-administration with the country.

The Dollar’s recent strength also poses a threat to the whole emerging market segment, and a concerted selloff in risk assets could quickly lead to new bear market lows in the Composite, with the technical setup being clearly negative.

Dollar Flexing its Muscles Again as Wall Street Open’s in the Red

Nasdaq, 4-Hour Chart Analysis

All eyes are on the Nasdaq in the US, where lower than usual trading volumes are expected due to the Columbus-Day bank holiday. The tech benchmark has been leading the way lower during the recent sessions, and it’s no different today. The major indices are still above their intraday lows form Friday, despite the sizeable bounce before the weekend.

Technically speaking, the correction just began in the US, with the trendline brakes across the board, and given the severe weakness in small-caps, we wouldn’t buy the dip here, as a deeper dip is very likely.

USD/CNH, 4-Hour Chart Analysis

The Dollar hit a marginal new 10-week high against the Euro amid the Italy-related worries, but the Chinese Yuan has been under the most scrutiny today. The key currency weakened to its lowest level against the Greenback since mid-August, and the Dollar/Yuan pair could now be headed towards the crucial 7 level, which has been defended by the Chinese central bank in the past.

The other emerging market currencies are stable today, and as we expected stock markets are under more pressure compared to the August-rout.


Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis


EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis


WTI Crude Oil, 4-Hour Chart Analysis

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

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Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.