6 December 2018 (8:31 am EST)
U.S. stock futures have been trading with big losses through the global session and at the time of writing, those highly negative numbers are pointing to a big gap down opening in U.S. stock markets today.
Dow Jones futures are trading with nearly -400 points’ loss, indicating that this index will open somewhere between 24,700- 24,600 levels. Just two sessions ago, this index was touching 26,000 and now, it is entering mid-24,000 range. This indicates how ferocious this week’s downtrend has been in this index and broader U.S. stock markets.
But then, last week’s rally was equally quick so no one should be surprised at this strong trend reversal.
For day traders in these markets, the same trading strategy will apply that we had suggested for traders in other markets. Wait for markets to recover, then sell if the trend again turns down from any resistance levels. These intraday support and resistance levels are given on our Pivot Trading page. Pivot levels for major stock indexes are:
- Pivot Levels for Dow Jones
- Pivot Levels for Nasdaq 100
- Pivot Levels for Russell 2000
- Pivot Levels for S& P 500
The weekly downtrend in U.S. stock markets has shown a lack of any bounce even after a big fall in the previous session. This indicates that there is still a strong downside risk to these markets.
Expect a choppy intraday trend after a gap down opening in these markets, which will be due to technical reasons. After that, we will have to wait and see if the downtrend returns and continues or markets hold on to some support and recover by the closing bell.