Equity Analysis and News
- Quadruple Witching to Spur Volume Pick Up
- Fed Rate Decision Poses Key Risk
| Price | 50DMA | 100DMA | 200DMA | RSI | IG Sentiment | |
|---|---|---|---|---|---|---|
| Europe | ||||||
| FTSE 100 | 7429 | 7574 | 7611 | 7486 | 46 | Mixed |
| DAX | 12434 | 12378 | 12499 | 12494 | 60 | Mixed |
| CAC 40 | 5494 | 5409 | 5407 | 5370 | 64 | Bullish |
| US | ||||||
| S&P 500 | 2937 | 2867 | 2815 | 2755 | 67 | Bullish |
| DJIA | 26751 | 25785 | 25289 | 24961 | 76 | Bullish |
| Nasdaq 100 | 7594 | 7461 | 7330 | 7048 | 57 | - |
Quadruple Witching to Spur Volume Pick Up
Today marks Quadruple Witching which represents the expiry of stock index and single stock futures and options. This occurs on the 3rd Friday of the last month in each quarter (January, March, June, September) and typically leads to a surge in volume.
Dow Jones Industrial Average Volume
Source: Thomson Reuters
Fed Rate Decision Poses Key Risk
The latest announcement from the Trump administration that $200bln worth of tariffs on Chinese goods will be imposed had a surprisingly muted impact on equity markets. Partially this could be due to the fact that the levy rate for the $200bln worth of tariffs will be at 10% as opposed to the previously touted 25%. Consequently, this has been shrugged off by the market with the key risk in the upcoming week being the FOMC rate decision. Markets have fully priced a 25% hike, as such, the focus will be on the accompanying statement and dot plot projection.
S&P 500
Yesterday saw the S&P 500 push to fresh record highs of 2942 as risk on sentiment continues to buoy equity markets. Given that the index continues to hover above the 2889-2899 bullish value area, the outlook remains to the upside. However, RSI indicators have begun to turn, suggesting a potential topping in the term, which in turns provides us with a cautiously bullish view.
Dow Jones Industrial Average
Similarly, with the S&P 500, the Dow Jones posted fresh record highs after breaking above the initial upside target at 26335. Eyes are for a consolidation above 26048-26335 in order to confirm that the outlook remains bullish. However, gains may be modest at best with the Relative Strength Index firmly in the overbought territory.
NASDAQ 100
Focus are on the all-time high (7697) posted in August following the recovery made in the index after support at the 7390-7450 pivot area held firm. Slight resistance touted at 7640 had been rejection, sending the index back down to the low 7600, however a break above could see the index make a run in on 7700.
KEY TRADING RESOURCES:
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
- See our Q3 forecasts to learn what will drive FX the through the quarter.
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
