Wall Street supported on Trump’s optimism, but DJIA dropped below 61.8% Fibo

• The S&P index fell 3.72 points or -0.30% at 2870.70
• The Nasdax index fell -32.733 points or -0.41% at 7910.58
• The Dow industrial average fell -138.97 points or 0.54% at 25828.36.    

Wall Street’s benchmarks  ended higher  from the lows, bouncing nicely the session after Trump said Thursday he’d gotten a “beautiful letter” from Chinese President Xi Jinping ahead of trade talks that were set to resume after US.S. trading hours on Thursday, but trade-war tensions keep investors on the cautionary side and in fixed income as a safer play this week. Subsequently, the Dow Jones Industrial Average ended off by 138 points, or 0.5%, at 25,828.36, (the low of the day was down at 25,517.39). The S&P 500 index lost a marginal 0.3% loss at 2,871 and fell into its fourth straight decline and close to early April level. The Nasdaq Composite Index dropped 0.4% at 7,911, ending at its lowest since April 9th.

Mixed trade signals

“Markets were all about escalating trade tensions between the US and China overnight, and news that China Mobile is barred from the US market on espionage concerns only added to negative sentiment. But comments from President Trump early this morning saw markets pare some losses. Trump noted that he had received a “beautiful letter” from Xi and that the two may speak on the phone. Tariffs on US imports of $200bn of Chinese goods were due to rise from 10% to 25% imminently, but Trump noted that a deal this week is still possible. We’ll find out shortly whether these words turn into tangible results,”

analysts at ANZ Bank explained

DJIA levels

Technically, bulls stepped up from the double Fibo confluence at 25522 which guarding 25300 (200 D SMA). However, the indicators lean slightly bullish with divergence in stochastics pointing to some upside to come yet. The fierce rejection on the session also supports a bullish bias with a near term target of just below 26000 at the 38.2% Fibo. On the flip-side, a break all the way down to the 24800 gap area would come into target ahead of the 24500s and then 50% of the upside run made at the end of Dec at 24150.