US equity indices remain resilient despite trade war concerns. The S&P500 has gone up every day except one since the imposition of tariffs on $34bn of goods. The US stock market’s resilience suggests investors are viewing trade related market dips as buying opportunities. The S&P 500 dropped 0.7% on Wednesday after the US announced plans to place tariffs on an additional $200bn of Chinese goods but then gained 1% over the following two days. Attention will now turn to the second quarter earnings with Netflix the first big name to report after the close on Monday. Also reporting during the week are Goldman Sachs, IBM and Microsoft.
On the 4-hourly chart, S&P500 (SPX) is now trading above the important 2800 level and bullish continuation will run into resistance at 2820 and 2854 before attempting new all time highs. Any pull back should find immediate support at 2788 but a break of this level would open the way to a deeper correction to 2770.
In the daily timeframe, the Nasdaq 100 (NDX) has been making new all time highs and appears to be trading in an ascending wedge. Strong technology results should enable the index push to Fibonacci extensions at 7445 and then the resistance trend line near 7575. On the flip-side, a reversal will find support at 7300 and then 7190. A break of the support trend line and horizontal near 7100 is needed for a deeper correction.