A new positive day for the European indices and futures of the main US. Traders in the US are waking up to the green light on their monitors and the expectations are for a strong end to the week.
The decline in tensions between the United States and Iran plays a key role in cash flow movements, which again find risky assets in fashion at the expense of hedgers.
That only means one thing – another strong day at Wall St. and profits for the shorts of gold, silver and yen.
By adding to this emerging market picture the prospects for a trade deal between the two largest economies in the world (possibly next week), all factors point to new peaks.
Despite the disappointing numbers from the US Employment Report, the country’s economic machine continues to run at full speed, offering near-full employment and a strong and well-paid workforce.
In such an economic environment, cyclical companies are most favored.
I expect a strong session for financial and technology companies (blue chips).
Technology already accounts for over 25% of the value of US markets, making it the largest sector. And as dominance fades from energy companies from the early 20th century – or rail companies in the second half of the 19th century – their position seems difficult to shift.
It is for this reason that the shares of Fang and New York Stock Exchange’s Fang + will be leaders during the session today.
The SPX is short-term diagonal resistance, currently attempting a breakthrough.
My estimate is that the accumulated purchases from the incoming cash flows will help to overcome a new record high.
We expect increased trading activity and high volumes due to Algos market intervention at the beginning of the session, and it is then that the resistance will fall, opening the door to promotion and new ATH.
Trader Aleksandar Kumanov