U.S stock market set to open lower after holiday

The stock market is set to open lower as DJIA futures are currently down more than 300 points. Despite the bearish situation, traders will wait at a lower level for a chance to enter long positions in stocks. Today, the market will focus on the release of flash PMI data. But we think most eyes will focus on the release of the Fed FOMC minutes of the meeting tomorrow. In the minutes of the meeting, the Fed might think that inflation persists and economic indicator shows a stronger number which might prompt further rate-hike. It could bring downward pressure in the stock market but we think it is opportunity for traders to add more long positions.

Technical Analysis

Dow Jones Industrial Average (INDU)

The index bounced from the daily SMA 50 and is set to continue the consolidation between the trendline and the averages. Traders will continue to monitor the index movement between the two levels. The next direction will be confirmed by the breakout and close outside of the range. We think a bullish breakout is imminent, whenever there is bearish movement then it is a chance for traders to add more long positions in stocks.

Automatic Data Processing Inc (ADP)

ADP share prices have moved lower and tested the previous swing low. There is a bullish bounce from the level and currently, the share prices might form a bearish wedge pattern. On the upside, the daily SMA 200 will become the resistance level to watch. If the share prices could break out and close above the averages then ADP will return to its bullish trend. Otherwise, a bearish rejection from the averages will confirm a bearish continuation.