U.S. Stocks Sell-Off On The Wall Street Open

Posted Monday, July 2, 2018 by
Shain Vernier • 1 min read

It has been a negative open on Wall Street. Fears over a U.S./China trade war and new tariffs going into effect have stock traders skeptical about the future of U.S. equities. For the first hour of trade, the DJIA is down nearly 100 points and the S&P 500 is off eight. Commodities are also showing weakness as both crude oil and gold are moving to the bear.

Today marks the first trading day of July and the beginning of Q3 2018. Will the U.S. indices rebound from a miserable June? Stay tuned, we are certainly going to find out.

DJIA Technicals

The last two weeks have brought considerable strife over trade wars and new tariffs. The DJIA has struggled accordingly, with values trending south on a seemingly daily basis. As a result, the September E-mini DOW futures have tested the 24000 level.

September E-mini DOW Futures (YM), Daily Chart
September E-mini DOW Futures (YM), Daily Chart

Here are two areas to watch as the trading week begins:

  • Resistance(1): 38% Retracement, 24528
  • Support(1): Swing Low, 23978

Bottom Line: As long as the current swing low holds up as support, a short from the 38% retracement of the current wave is a solid trade to the bear. Sells from 24499 offer nice entry with the intermediate-term trend. Using an initial stop at 24551, this trade returns 52 ticks using a 1:1 risk vs reward management plan.

We may see limited participation and chaotic price action due to the July 4th holiday. If this trade does not go live in the next two sessions, it will be void until Thursday/Friday.

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