Wall Street analysis: US futures recover, still far below weekly opening levels

Monday's sell-off in equities paused in the previous US session, with Asian and European indexes recovering ground solidly, and pushing US futures up. The slump was triggered by news that US President Trump asked the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at 10% if China doesn't change its trade practices. Trade fears ebbed for now but given that there was no change in the status-quo, it could return any time, so caution prevails.

The Dow's daily chart shows that the decline stalled at a brink of a bearish breakout, as it held above the 100 and 200 DMA, both anyway directionless and converging at 24,645, the daily low. The index is below its 20 DMA which losses upward strength, while in the mentioned chart, the Momentum indicator heads lower around its 100 level and the RSI aims to recover but at 47, all of which leans the scale toward the downside. The index holds within the limits of a bullish channel that failed to break lower multiple times between March and April.

The S&P daily chart shows that it's recovering after flirting with a bullish 20 DMA earlier in the day, while technical indicators hold in positive territory, although with no certain directional strength. The risk remains leaned to the upside, as long as buying interest keeps surging on dips, with a key support now at 2,732, Monday's low.