US Stock Markets Next Week: Rangebound, Or DownTrend?

13 January 2019

World stock markets are following the lead of US stock markets, so let us check what could happen to U.S. stocks, and we will know what kind of trend to expect in global stock markets.

U.S. stock markets traded sideways last week after no solution emerged over a Southern border wall between President Trump and Democrats. Last three sessions saw a volatile and narrowly range bound trading pattern in U.S. stock markets, indicating that big traders/ investors had moved to the sidelines till this dispute and government shutdown ended.

Today, President Trump tweeted something that can have a negative effect on U.S. stocks. He wrote “We have a massive Humanitarian Crisis at our Southern Border. We will be out for a long time unless the Democrats come back from their “vacations” and get back to work. I am in the White House ready to sign!”

“We will be out for a long time…”? That can make bulls retreat even further and bring out bears from hibernation. U.S. stock markets are already facing a technical resistance and if any big selling starts now, then it can trigger a technical, bearish stampede. Obviously, global stocks will follow that trend.

If that happens, then we will have to watch this month’s support levels in U.S. stock markets. These markets are currently trapped between this year’s new support and last year’s lowest closing levels- that is now acting as resistance and stopping major indexes from going higher.

In other news that can keep global stocks under pressure, is another Brexit vote in the British Parliament (Jan 15) and a vote of confidence in Greece after an ally quit the ruling coalition led by Alexis Tsipras.

Rising Oil and the Dollar index will be other factors that can affect emerging markets.

In short, we can expect another volatile week in U.S. and other stock markets. Soon, world stock markets will start to ring their opening bells and U.S. stock future will also start trading. The trend in these futures will show how markets react to the Trump tweet. That will also set the trend for U.S. and world stock markets.

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