All a bit of a stunned quiet today after yesterday’s brutal sell off. There has been a rally of sorts but very little conviction to it and we continue to be far busier on down days then up days. Big Tech did steady after Europe closed and that does seem to have given some confidence for a Turnaround Tuesday (history shows 15 of the last 18 Mondays that have been down more than 2% have rallied the following day) but in Europe it is lacklustre at best. We’ve had Boris Johnson speaking over lunchtime to give further details on “enhanced measures” to curve the virus whilst trying to prevent a full lockdown but one thing is clear – this will be the last 2.15 I write from the office for a while. Just as I was getting back used to it!

And the day has arrived…

European indices are finally out of their 50dma range bound but the direction of the move  disappointing (especially if vols are showing some conviction). All indices are down ~3% in the region (biggest intra-day drop since July) and the support levels we are now watching are the early August lows (with mid-June lows following). The IBEX the first index to break the August low of 6788 and it doesn’t look like it will recover (next support at 6421). Aug lows on the FTSE MIB (18948) also gone, June lows -3.5% below from here. Eurostoxx 50 one to watch this afternoon – close to beak Aug low of 3174 and if broken, next support at 3054.

Sideways very much the theme of the week after the volatility of last week and even though volumes are up today that’s really only on the quadruple witching and reweights with “real” volumes seemingly low. Our charts team focussing on growth still outperforming value with an all time high for the MSCI indices and Stoxx not too far behind. Over the pond, mega cap tech stocks held their support levels overnight and the S&P managed to close above its 50dma. Nasdaq did broke below its 50dma for the whole day for the first time since April. We will be watching the support levels from the tech stocks again today.

It is like an endless battle isn’t it?

Just think about how many times have we seen EU indices trying to break the so called summer ranges…Everything was getting rosier with positive momentum really starting to build up but boom – the cautious tone from the Fed last night was just enough to kill it all.  We saw the US mega caps underperform overnight with Google the only one (or first for now?) to break its support level. ES1 (-1.7%) and NQ1 (-2.6%) both trading down all morning so keep an eye on its peers – Microsoft support at $200, Amazon at $2888, Apple at $100 and Facebook at $250.

With all eyes on the Fed, today was always going to be a quiet session. Volumes are low across the board with EU indices trading -10% below their 10d AVAT. Equities have been trading pretty mixed since the open but it is definitely encouraging to see some positive momentum building up in the region. We saw the Swiss MI making a 6 month closing high yesterday and the OMX made a 6m high. Today we are watching the CAC as any break above 5117 (200 dma) would be helpful, 5045 last.

Today was the first day in the office for most of the team. I’m not going to lie, the tech issues on arrival were slightly stressful but other than that it feels good to be back. Most ordered a nice bacon & egg roll for breakfast (Nutella pancakes for me) so the 30mins sleep that we all scarified were definitely worth it.

QUOTE OF THE DAY “It’s a disaster for Cambridge, the UK and Europe… It’s the last European technology company with global relevance and it’s being sold to the Americans.” Arm’s co-founder Hermann Hauser as Nvidia has agreed to buy the business from Softbank KEY INDEX MOVES   Stoxx50 FTSE IBEX FTSEMIB ▲ +0.3% ▲ +0.1% […]

Right I’m going to leave all the UK/EU tensions aside today. We all know the implications of further escalations but the reality is that for now, all we can do is hope for the best outcome. In the meantime, let’s look at what markets have done this week. Last Friday I spoke how investors were trying to figure out whether last week’s sell off was simply profit taking or the beginning of a further deep. If you ask me, the jury still very much out on that…

S&P futures slightly lower today (ES -0.17%) following yesterday’s bounce. Importantly, 50dma supports are still holding for S&P (SPX 3312), Nasdaq (NDX 11094) & Dow (INDU 27203), no significant damage yet to the past months uptrends. Nasdaq futs (NQ +0.42%) support at 10845 on futs & 11th August low at 10855 NDX, as well as MSFT support at 200, AAPL at 100, AMZN at 2888, & FB at 250).

I must admit I was a little worried before the open this morning. EU futures were pointing for another day in the red but luckily it hasn’t been like that – phew! EU equities recovered from a choppy start not long after the open and have been trading sideways since. In terms of levels to watch, we will have a close eye on the US this afternoon as the support levels in the region are more important in the short-term. One to focus on is the S&P, 3093.85 is its short-term support (50 dma) and 2965.66 its long-term (June low).