China Hits Back

Outlook 04/02: U.S. index futures are bearish on the first day of the second quarter of 2018. In response to the Trump administration's recently implemented tariffs on steel and aluminum, China has retaliated with tariffs on imports of 128 American-made products. The tariffs, which are hitting such products as wine and frozen pork, are as high as 25% and go into effect Monday.

The March jobs report on Friday will punctuate the typically crowded early-month economic data schedule while the earnings flow will be light. A speech from Federal Reserve Chair Jerome Powell on Friday afternoon regarding the U.S. economic outlook will also feature on the economic calendar. The big event from public markets this week will be the Tuesday debut of Spotify (SPOT), which will float shares in a direct listing on the Nasdaq.

/ESM8 Value: YVAH 2653 YPOC 2643 YVAL 2628

/ES Plan: On Friday market closed bullish (PBT 2675) and overnight shows a bearish profile (GBT 2625), moving within Friday's value, so today's options are:

A) If market remains above YVAL 2628 with bullish internals, be a buyer leaning on 2628-30 towards GAP 2636.75 ONH 2641.50 and YVAH 2653. 'Look below and fail' is a signal of strength.

B) If market starts to move below YVAL 2628 with bearish internals, become a seller leaning on 2628-25 towards HVE 2620 GAP 2608 and LIS 2600. 'Look above and fail' is a signal of weakness.

Tips: Line in the Sand (LIS) refers to a key level that shows who could be in control above/below that level, it works as a bull/bear line. More on Glossary.

Today's Economic Calendar

09:45 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
06:00 PM Fed's Kashkari speech

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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