U.S. markets opened with a gap, but sellers managed to block it. Janet Yellen, whom yesterday reported to Congress, with her own words charged some high-tech stocks. Specifically, she talked about "some" companies in the field of social media and biotechnology. It was about the low-price companies included in the Russell 2000 Index, which fell for 1%.
As we can see on the chart, this Index was in a bear channel since the beginning of the year, then penetrated it, grown up and tested the highs. When the Index broken 8/21 EMA that used to be a great support, sentiments changed. If sellers want to control the price, they should not give up resistance zone of $116.00-.50. Breakthrough below $114 may attract more sellers and then the next target will be $111.80, where 200 EMA is.
S&P Index became more volatile while staying in this creeping trend. It’s not a lot to judge, but as always there are support and resistance levels to create an effective plan and prepare themselves to different scenarios. So we have a reverse candle with a high of $198.10 — resistance, 8/21 EMA still act as a support, after Index broken the consolidation that took place since May 21. As long as the price is above the middle-term trend I won’t be looking at the bear scenario.
French CAC40 took a pause after the last week fall and is now traded near the bottom below 8 EMA. Sentiments changed here after the middle-term trend penetration. Resistance is 4.360, support is 4.280-4.300. As the price is below the key moving averages, that are also pointed downwards, I’ll look for Put-option trading opportunities near the resistance, as well as the resolution of this consolidation down.
Volatility of GBP/USD currency pair has grown after the Unemployment data statement. It acts chaotically, gives false breakthroughs. We need to wait for this base to be resolved to see what to do next. Penetration and closure above 1.71700-800 may attract more buying and this macro trend may last. 1.70600 support penetration may lead the price to the next potential support of about 1.69500, where 50 EMA is.
Since the report season began in the United States — volatility and activity will grow despite the fact that it's summer — a period when many traders and investors are on their vacations. Yahoo and Intel reported yesterday after the closure. Bank of America will show their previous quarter report before the opening.