US stocks in search of a firm direction

Major US equity indices opened marginally lower on the first trading day of the week as investors assessed comments by various FOMC officials in order to determine the Fed's near-term monetary policy outlook

In an interview with Fox Business, Chicago Fed President Charles Evans said on Monday that he would support four rate hikes if economic outlook held up and inflation growth accelerated. However, Minneapolis Fed President Neel Kashkari continued with its dovish bias, raising concerns over the Fed’s inflation forecasts and slack in the US labor market and failed to provide any fresh bullish impetus for the markets. 

Meanwhile, a fresh wave of bearish sentiment in oil markets, with WTI crude oil sliding over 1.0% for the day, further weighed on energy stocks and collaborated to a mildly weaker investors' sentiment surrounding riskier assets - like equities.

Investors would remain focused on a slew of Fed speakers, including the Fed Chair Janet Yellen, lined-up during the course of current trading week in order to find a fresh catalyst for next leg of directional move in the markets.

At the time of writing, the Dow Jones Industrial Average was down around 10-points to 20,905, while the broader S&P 500 Index lost nearly 3-points to 2,375. Meanwhile, tech-heavy Nasdaq Composite Index was unchanged near Friday’s closing around 5,900.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, "we are below 2374....but again...we need to wait and see what the cash guys do....If they can stay below here the sellers will once more be back in control and they will be looking to take us lower to the 2361/55 area again....It is a bit worrying when you think that we have to clear 2405 and hold above it to take off this downside pressure we now see evident...Also if we fail to hold over 2352 it will have more bearish bias to 2336...."

"The DJI isn't looking so great either...The key level on that is 20825..we lose that ...especially on a close basis and we are going quite a bit lower with 20611 then targeted...we really need to clear 20985 to make this look a little stronger and challenge the 21169 highs...The daily charts look positive from the stochastic. But weeklies negative...and the price isn't really reflecting the stochastic...so we go with the price..."
 

    1. R3 2392.42
    2. R2 2389.08
    3. R1 2383.92
  1. PP 2380.58
    1. S1 2375.42
    2. S2 2372.08
    3. S3 2366.92