* U.S. equity index futures advance; Nasdaq 100 up >2%
* FOMC results expected 1400 EST/1800 GMT
* Euro STOXX 600 index rallies >2%
* Dollar, bitcoin, crude rise; gold dips
* U.S. 10-Year Treasury yield ~1.78%
Jan 26 - Welcome to the home for real-time coverage of
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S&P 500: ON TRACK FOR BIGGEST JANUARY DROP IN ITS HISTORY
(0900 EST/1400 GMT)
Wednesday's results from the latest FOMC Meeting may be
taking on added significance given that the S&P 500 ended
Tuesday on track for its worst January performance in its
history.
Indeed, the SPX is down 8.597% for the month, putting in on
track for a bigger January slide than 2009's 8.566% tumble,
which stands as the worst start to a year for the benchmark
index using Refinitiv data back to early 1928.
Meanwhile, based on the daily RSI, the S&P 500 ended Tuesday
at its most oversold level since late-February 2020:
It now remains to be seen if this will prove to be a
sufficiently washed out condition. Of note, since late 2018, the
two most oversold readings on a daily basis, in October 2018 and
February 2020, occurred in the early stages of declines. It was
not until the SPX made new lows, coupled with a momentum
convergence, that true bottoms formed.
If the SPX breaks Monday's low at 4,222.62, and the 23.6%
Fibonacci retracement level of the entire March 2020-January
2022 advance, at 4,198.70, it can suggest risk for much more
significant downside. The 38.2% Fibonacci retracement of the
March 2020-January 2022 advance is at 3,815.20.
On strength, the 200-day moving average, which ended Tuesday
around 4,432, presents resistance. The January 10 low, at
4,582.24, also looks to be a significant hurdle.
In the event of sudden upward reactions, traders will be
assessing their structure, character and extent closely. This
especially because, a CBOE Put/Call measure, which can be a
considered a contrarian sentiment indicator, has broken out to
66.6%, or its highest level since May 2020, and a
number of market internal measures have yet to clearly
stabilize.
(Terence Gabriel)
*****
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)