Equity markets have rallied strongly this year but they might be getting set for their toughest test in some time.

This week, the US and China will meet to discuss the trade deal, which has a deadline of March 1.

Last week we saw some weakness in markets as the US President expressed his concerns over the deal.

We also have US Retail Sales and Inflation data as well as a whole host of Fed Speakers. Earnings season is also winding down slowly in what has been better than expected in most cases.

So far today the ES is down -0.14% and has drifted lower since the open.

Technical Outlook

The SPX is still holding above the 2700 level and we will possibly see a real test when the US opens tonight.

The round number levels are the major focus at the moment and 2600 is next in line.

2700 has been a strong level and we will know a lot more about markets come Friday after we hear from the fallout of the trade talks as well as the major data.