Weakness in MSFT and META (and Overall Market) In Aftermath of Their Earnings Reports

Good Thursday Morning, MPTraders!  October 31, 2024-- Pre-Market Update:  Today is the final trading session of October... Weak overnight price action MSFT and META in the aftermath of their earnings reports owing to disappointing conference calls by both companies, during which each outlined forthcoming headwinds that investors did not want to hear, which, in turn, has pressed ES lower to test critical support at 5800 (see below)... Key Inflation data in the form of Personal Consumption Expenditures (PCE) and Weekly Jobless Claims data are due out at 8:30 AM ET... After the close, more potentially consequential earnings from AMZN, AAPL, and INTC ahead of tomorrow's monthly Jobs Report from the BLS...

Weakness in both MSFT (-3.6%) and META (-2.6%) in pre-open price action has pressed ES to the downside in ugly overnight technical weakness. My attached Daily and 4-Hour charts show a developing near-term bearish setup UNLESS the index reverses to the upside, putting some distance above support at 5800. 

My Big Picture Daily Chart shows that ES has sliced beneath BOTH my 8 Day EMA and the 20 Day SMA in and around 5849/52. From a Big Picture perspective, ES must recover above the MAs to neutralize current negativity and to avert downside continuation that breaks the key October support plateau, triggering a downside projection into the 5725 target level... (continued below my Daily Chart)...

My 4-Hour chart view of ES shows that the sideways rangebound pattern since for the past 2-1/2 weeks remains intact, but just barely, as the index is testing the lower boundary at 5800. So far, 5800 has contained the selling pressure, but once again, to neutralize the negative 4-Hour setup, ES needs to claw its way back above 5855/60, otherwise it will remain vulnerable to downside continuation toward 5725... Last in 5812.50... ahead of the 8:30 AM ET PCE and Weekly Jobless Claims data...


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Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

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