U.S. Stocks Retrace On The Weekly Open - Forex News by FX Leaders

U.S. Stocks Retrace On The Weekly Open

Posted Monday, April 8, 2019 by
Shain Vernier • 1 min read

It has been a negative open to the trading week for U.S. stocks. A triple-digit drop in the Dow Jones Industrial Average (DJIA) has been the early story, with losses in the S&P 500 SPX and NASDAQ following close behind. As of now, the positive sentiment of last week is fading quickly. Stocks have given back a large portion of early April’s gains on a considerable two-session retrace.

On the news front, today features a wide-open U.S. economic calendar. A few minutes ago, U.S. Factory Orders (MoM, Feb.) were released to the public. The figure came in at (-0.5%), slightly outperforming projections of (-0.6%). Today’s Factory Orders report is not a primary market mover; however, it is negative and suggests that consumption is tapering a bit from previous levels.

U.S. Stocks Backpedal To Open The Week

Since last Friday’s strong Wall Street open, U.S. stocks have been rotating to the bear. June E-mini DOW futures are certainly echoing the weakness, falling toward the 26000 handle.

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

Here are two levels to watch for the near future session:

  • Resistance(1): Psyche Level, 26500
  • Support(1): 38% Current Wave, 26077

Bottom Line: The intermediate-term bullish trend in the DJIA remains valid. At this point, buying dips is a viable plan for trading the action. As long as the Psyche Level (26500) remains the high water mark for the June E-mini DOW, buying from 26086 is good trade location to the long. With an initial stop at 26044, this trade produces 40 ticks on a slightly sub-1:1 risk vs reward ratio.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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