Sample Category Title

S&P500 made a nice recovery in three waves, up from the 2709 lows which we labelled as a corrective wave 2 of a higher degree. Particularly we see sub-wave C) of two in play which can look for resistance and a bearish turn near the Fibonacci ratio of 38.2/61.8. That said a reversal in impulsive fashion will confirm a completed correction and more weakness.

S&P500, 4h

Pivot (invalidation): 5.7340

Our preference Short positions below 5.7340 with targets at 5.6500 & 5.5910 in extension.

Alternative scenario Above 5.7340 look for further upside with 5.8040 & 5.8700 as targets.

Comment A break below 5.6500 would trigger a drop towards 5.5910.

Pivot (invalidation): 0.7125

Our preference Long positions above 0.7125 with targets at 0.7150 & 0.7165 in extension.

Alternative scenario Below 0.7125 look for further downside with 0.7115 & 0.7100 as targets.

Comment A support base at 0.7125 has formed and has allowed for a temporary stabilisation.

Pivot (invalidation): 1.2930

Our preference Long positions above 1.2930 with targets at 1.2975 & 1.3000 in extension.

Alternative scenario Below 1.2930 look for further downside with 1.2910 & 1.2895 as targets.

Comment The RSI calls for a rebound.

Pivot (invalidation): 0.9890

Our preference Long positions above 0.9890 with targets at 0.9930 & 0.9955 in extension.

Alternative scenario Below 0.9890 look for further downside with 0.9865 & 0.9845 as targets.

Comment The RSI is bullish and calls for further upside.

Sterling drops notably after September consumer inflation data came in lower than expected. Headline CPI slowed to 2.4% yoy, down from 2.7% yoy and missed expectation of 2.8% yoy. Core CPI slowed to 1.9% yoy, down from 2.1% yoy and missed expectation of 2.1% yoy.

The ONS noted that "The largest downward contribution to the change in the CPIH 12-month rate came from food and non-alcoholic beverages, where prices fell by 0.1% between August and September 2018 compared with a rise of 0.8% between the same two months a year ago. The main effects came from meat where prices fell, between August and September, this year but rose a year ago and from chocolate."

Also released, RPI slowed to 3.3% yoy versus prior 3.5% yoy and expectation of 3.5% yoy. PPI input rose to 10.3% yoy from 9.4% yoy. PPI output rose to 3.1% yoy from 2.9% yoy. PPI output core rose to 2.4% yoy from 2.2% yoy.

Full release on CPI.

Pivot (invalidation): 112.15

Our preference Long positions above 112.15 with targets at 112.50 & 112.75 in extension.

Alternative scenario Below 112.15 look for further downside with 111.95 & 111.70 as targets.

Comment The RSI is supported by a rising trend line.

Pivot (invalidation): 1.3195

Our preference Short positions below 1.3195 with targets at 1.3160 & 1.3140 in extension.

Alternative scenario Above 1.3195 look for further upside with 1.3225 & 1.3255 as targets.

Comment The RSI shows downside momentum.

Pivot (invalidation): 1.1580

Our preference Short positions below 1.1580 with targets at 1.1540 & 1.1515 in extension.

Alternative scenario Above 1.1580 look for further upside with 1.1595 & 1.1610 as targets.

Comment The immediate trend remains down and the momentum is strong.

Pivot (invalidation): 2775.00

Our preference Long positions above 2775.00 with targets at 2831.25 & 2863.00 in extension.

Alternative scenario Below 2775.00 look for further downside with 2749.00 & 2710.00 as targets.

Comment The RSI is bullish and calls for further upside.