SPX contracts, however, seemed to have found support, bouncing off the 200-hour MA at around 9PM EDT.
In the Asian session, Japan’s Nikkei 225 eked out a gain (+0.14%), with big names like Softbank Group (T:9984), Fanuc (T:6954) and Fast Retailing (T:9983) weighing on the index. Seoul’s KOSPI closed mostly flat (+0.02%), with chipmaker SK Hynix (KS:000660) (-0.25%) dragging prices lower.
China’s Shanghai Composite (-1.7%) underperformed on speculation the local government will wind down stimulus. Technically, the price met resistance at the Apr. 8 highs, setting the stage for a small double top and the potential for a larger H&S top.
Investors shed Chinese bonds alongside equities, pushing the yield on 10-year notes higher. Technically, the price hit a pause around the 200 DMA, forming a pennant continuation pattern, following the completion of a double-bottom early in the month. The RSI, however, sets up a potential H&S top, as the MACD tops out.
Markets in Hong Kong and Australia remained closed for the holiday.
On Thursday, U.S. stocks wrapped up the holiday-shortened week slightly lower, giving up a three-week rally despite some upbeat corporate earnings results and better-than-expected manufacturing data in China, which had boosted sentiment across global markets earlier in the week.
With U.S. equities still nearing all-time highs, traders will have to determine whether the recent shift, by global central banks, to a dovish stance will be enough to compensate for an overall expectation of contracting earnings, amid some ongoing red flags to watch and a lack of forceful catalysts.
In commodities, oil gapped up, jumping more than 2% after the U.S. said it plans to stop Iran oil waivers. The leap prompted a breakaway upside gap, whose bullishness is compounded by the completion a falling flag. However, that doesn’t mean the WTI price won’t retest the dual support of the gap’s bottom and flag’s top. As of the time of writing, the price has been trendless for the fifth consecutive hour.
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