S&P 500

U.S. Stocks Sputter On Open

Posted Tuesday, June 25, 2019 by
Shain Vernier • 1 min read

U.S stocks have kicked off Tuesday’s trade on their back foot, falling into negative territory during the half-hour since the opening bell. The DJIA DOW (-55), S&P 500 SPX (-6), and NASDAQ (-21) are all in the red as traders take an early noncommittal stance toward equities.

The lead story of the day is escalating tension between the U.S. and Iran. Following a U.S. drone being shot down late last week, President Donald Trump has elected to tighten economic sanctions against Iranian leadership in lieu of military retaliation. The result has been a virtual break in diplomacy, with Iran’s U.N. Ambassador Majid Takht Ravanchi warning of a “very dangerous situation developing in the Persian Gulf.” 

Thus far, investors are monitoring their risk exposure carefully, with many choosing gold over U.S. stocks.

U.S. Stocks Retreat On The Open

The September E-mini DOW is trading in a consolidation pattern following the weekend news from the Persian Gulf. The past three sessions have been extraordinarily tight; is this simply a pause before topside extension?

U.S. stocks
September E-mini DOW Futures (YM), Daily Chart

Here are the levels to watch as the session progresses:

  • Resistance(1): Swing High, 26922
  • Support(1): 38% Current Wave, 26530

Bottom Line: The June uptrend for the DJIA and U.S. stocks remains valid. With a bit of luck, we will have the opportunity to go long from a retracement level very soon.

As long as the Swing High (26922) remains the top of this market, I will have buy orders in queue from 26535. With an initial stop at 26494, this trade produces 82 ticks on a 1:2 risk vs reward management plan.

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