Chart of the Day, US500 (S&P500)

<h2><span>Chart of the Day US500 (S&amp;P500)</span></h2>
<p><span>US500 S&amp;P500 Bearish – Probable Price Path</span></p>
<p><span>Sabre-rattling in the form of US Treasury Secretary Mnuchin’s comments that President Trump is reviewing options to penalise China and warned China to meet its obligations of the Phase 1 trade deal did not keep Wall Street from climbing overnight. S&amp;P500 saw a late rally to add 0.4%, led by tech stocks including Apple and amid higher oil prices, while Carnival is planning to begin sailing on 1 August. Meanwhile UST bonds traded lower with the 10-year bond yield at 0.63% amid a deluge of corporate and government bond supply. The Treasury sold a record $60b of 3-month bills at 0.11%, $51b of 6-month bills at 0.13% and $30b of 105-day cash management bills at 0.115%. The 3-month LIBOR fell to 0.50088% (lowest since December 2015) and LIBOR-OIS narrowed to 46bps.</span></p>
<p><span>US: Factory orders fell more than expected by a record 10.3% in March, after a 0.1% dip in February. The Trump administration’s “turbocharging” of an initiative to extract global supply chains from China may include tax and re-shoring incentives. The New York Fed will start to buy ETFs in early May, while the Treasury expects to issue $2.999 trillion of debt in 2Q to finance pandemic-related government stimulus. California reported the lowest number of Covid-19 deaths in three weeks and Governor Newsom said some lower-risk businesses could reopen as early as Friday. </span></p>
<p><span>EU: The manufacturing PMI sank from 44.5 in March to 33.4 in April, the lowest since the survey began in mid-1997, with the German PMI posting a record contraction of 34.5 (lowest since March 2009) down from 45.4 in March. Meanwhile the Sentix index edged up slightly from -42.9 to -41.8 aided by the expectations gauge at -3.0 (previously -15.8).</span></p>
<p><img class="aligncenter size-full wp-image-42900" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49.png" alt="" width="2136" height="1221" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49.png 2136w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49-300×171.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49-1024×585.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49-768×439.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49-1536×878.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.05.49-2048×1171.png 2048w" sizes="(max-width: 2136px) 100vw, 2136px" /></p>
<p><span>From a technical and trading perspective, the S&amp;P500 has tested the pivotal 61.8% retracement of the pandemic crisis decline this area attracted profit taking. On the intraday charts th eS&amp;P’s current decline from the 2970 area has impulsive qualities as such traders should pay attention to how price responds at the 2875, 50% retracement of the first leg of a potential three wave correction. An hourly rejection of this area and close below the near term volume weighted average price should see bearish exposure rewarded, initially targeting a move back to the interim decision point at 2820, bearish exposure should be risk free here as buyers may reengage, if insufficient demand here then look for 2779 ahead of the primary objective at 2730</span></p>
<p><img class="aligncenter size-full wp-image-42901" src="http://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.03.58.png" alt="" width="1639" height="1224" srcset="https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.03.58.png 1639w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.03.58-300×224.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.03.58-1024×765.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.03.58-768×574.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/05/Screenshot-2020-05-05-09.03.58-1536×1147.png 1536w" sizes="(max-width: 1639px) 100vw, 1639px" /></p>
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