Equity markets have had a pretty nice run-up since the pre-Christmas selling, but there are some signs of weakness in early Asian trade.

The ES is pointing to a gap down of around 0.5% at the moment and Asian equities are weak. There are a few things that we can look at that might suggest markets are running out of puff.

Sell the fact after FOMC. The minutes suggested that the FOMC is looking to ease off the tightening for the time being. Now that markets have a clear picture in mind, the relief rally might have run its course.

US-China Deal is fluff so far. There is little by way of real news on how the talks are developing. Many are now thinking the deadlines will approach and simply be pushed out as is the norm. Until we see anything real, not just promises, markets might be a little jittery.

Technical Outlook

The SPX has now held below 2600 resistance and given the weak lead-in today this will clearly be an important level.

If price does fall the obvious support is 2500, so I’ll be watching the US closely today.

There has been plenty of green lately so, for now, I suspect we are due for some more selling.