The beginning of the end?📉😰 - Tuesday Brief

Morning treaders. Back with our Tuesday report…this will be a fun one!

Lots of red today across the board so let’s cut to the chase and dive right in…

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Impact Snapshot

• Key Earnings:

• China's export decline, reaches its sharpest rate since February 2020

• Banks under pressure following Italian banking tax and Moody downgrades

Market Evaluation

Stocks fell around the world as traders rushed into bonds after a raft of news on China, Italy and the US fanned worries about the financial system and the global economy.

Major lenders Bank of New York Mellon, U.S. Bancorp, State Street, Truist Financial, Cullen/Frost Bankers and Northern Trust are now under review for a potential downgrade.

China saw a 14.5% year-on-year drop in exports, while imports came in 12.4% lower year-on-year.

Economists polled by Reuters expected a 12.5% slide in exports and a 5% drop in imports.

European markets also pulled back as investors braced for significant inflation data due later this week and reacted to a shock banking tax announcement out of Italy.

The Dow Jones Industrial Average was down 1.2%. The S&P 500 dipped 1.1%, while the Nasdaq pulled back by 1.4%.

The eventful start of the day with major reports across the globe brought fear in the markets as traders and investors start to evaluate if markets were due to a pullback after the constant upside continuation thru out the last month.

The equity market is also pulling back after a rally that drove the S&P 500 up almost 20% this year.

Thru out our analysis of the markets and the bigger picture, we’ve mentioned the weak structure that the short covering rally would bring once it stopped, this is like removing an additional support from the market.

Markets Breakdown

This lead to strong downside continuation thru out the whole ON session.

As we’ve written on the closing post yesterday Here, we’ve mentioned 4537 as the last key upside intraday zone which we were interested in for the bullish scenario of this range.

Strong downside continuation was present after the top zone of 4537 yesterday as the emotional events triggered heavy sell-side activity. 

Which lead to the breakdown of the 4519 pivot which was targeting the first downside targets of 4506/4493 zones as we’ve mentioned on the bearish scenario in the ON session post here.

As we’ve written in our Sunday report here

finding acceptance bellow the 4500 area could lead into a roll over targeting the lower end of the distribution which would not look good if bulls don’t claim and hold above 4500 again until the end of the session.

ES

The targets we look for until NY close & Targets to pay attention Tomorrow:

• Main pivot: 4493

• Upside Levels: 4526/4547/4560

• Downside Levels: 4478/4465/4452

That’s it for today.

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Have a great rest of your week!

-The QuantVue Team

Disclaimer: Futures and options trading carries a significant level of risk and may lead to substantial financial losses. The content provided in this newsletter is solely for informational purposes and should not be construed as a trade recommendation or financial advice. It is essential for readers to independently assess and make their own investment decisions, taking into consideration their personal financial situation and risk tolerance.