EQUITY TECHS: E-MINI S&P: (H5) Double Top Reversal Threat

• The S&P Global US manufacturing PMI was surprisingly revised up to 51.2 in the final January print (prelim 50.1) from 49.4 in December, leaving it at its highest since June.
• “Both output and new orders returned to growth in January, while optimism in the year-ahead outlook for production hit a 34-month high. At least part of the jump in confidence and more buoyant demand picture reflected a sense among firms that business conditions will improve under President Trump.”
• “Meanwhile, input costs continued to increase sharply, leading the pace of output price inflation to accelerate for the third month running to reach the highest since March 2024."
• See the full S&P Global press release here.

Goldman Sachs write “the key drivers of Bund cheapening vs swap - in particular the increasing availability of safe assets - are still in place. However, we also find evidence that the Bund cheapening over the last 6 months has moved ahead of the incremental fiscal stimulus likely to be delivered in 2025.”

• They believe that “this leaves the market vulnerable to under-delivery, in our view, especially should the German election fail to free up space to ease fiscal policy.”
• As a result, they suggest “the risk-reward for Bund shorts, either outright or vs swap, is not compelling.”

• RES 4: 6162.28 High Jan 24 and a key resistance    
• RES 3: 6057.75 Low Jan 31 and a gap high on the daily chart 
• RES 2: 6021.01 50-day EMA 
• RES 1: 5988.75 Intraday high              
• PRICE: 5984.50 @ 14:39 GMT Feb 3 
• SUP 1: 5935.50 Intraday low          
• SUP 2: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
• SUP 3: 5842.50 Low Jan 14 
• SUP 4: 5809.00 Low Jan 13 and a key resistance 

The S&P E-Minis contract has started the week on a bearish note. The gap lower today and a breach of support at 5948.00, the Jan 27 low, strengthens a bearish threat and cancels - for now - a recent bullish theme. An extension down would open 5892.37, a Fibonacci retracement point. Initial resistance is at 6057.75, the Jan 31 low and a gap high on the daily chart. Clearance of this level would reinstate a bullish theme.