7 February 2019 (Update:11:49 am EST)
U.S. stock markets have fallen with big margins and have turned negative for the week and month. Dow Jones is flashing risk signals and if the index falls and closes below 25,000, then the the index and broader U.S. stock markets will become vulnerable to a return of last year’s downtrend. This mega index has already lost -350 points so early in the day. European stock markets also ended the session with heavy losses. German index DAX lost 300 points (2.66%) today.
If U.S. stock markets do not recover later in the session, then we can expect a highly negative global session on Friday.
(Earlier: 8:25 am EST)
U.S. stock futures have fallen with European stock markets, indicating that U.S. stocks will open today with deep cuts.
Yesterday, we had discussed how U.S. markets had turned range bound a day before, which showed that these markets were pausing after a marathon, 7 week rally. From a range bound session, U.S. stocks progressed to close with mild losses yesterday and today, these markets are ready to with full-blow negative numbers.
So you see, U.S. stock markets have been slowly changing their course and clearly giving indications of how the trend is pausing, changing and reversing from current levels. All you have to do is observe markets, wait for such trend-changing signals and then trade with the trend.
After a gap down opening, there will be two possible trading patterns in U.S. stocks. Markets will either find support and trade higher, recover losses and trade within last one or two sessions’ trading range.
Or, U.S. stocks will recover slightly and then resume their intraday downtrend.
Day traders can use intraday pivot levels provided on our Pivot Trading page and see which levels provide support or resistance. For major indexes, these levels are:
- Pivot Levels for Dow Jones
- Pivot Levels for Nasdaq 100
- Pivot Levels for Russell 2000
- Pivot Levels for S& P 500
Expect a volatile intraday trend today in U.S. stock markets. Major indexes could trade within their previous session’s range in a sideways manner or continue to decline further after a lower opening, as suggested by negative futures at the time of writing.