FOR WEDNESDAY: (5/16): Trade a bit on edge with war game exercises spooking the North Korean President. Higher interest rates make 3-year bills a win over stock dividends and 10-year note over 3% is a bit of a take-the-money-in-May-and-run play. Stocks haven’t put in a major sell signal yet but are on the edge. Patterns on bonds look deeper into next week so the writings on the wall there.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR WEDNESDAY: (5/16) S & P hit 2700 on Tuesday and we had key support at 2699. Additional support at 2694 and 2673.50. Wednesday is a transition day and we’re not in a rush to buy early until we see overnight action. T-notes hit their 118.18 target and don’t have to fall more so a bounce on notes may prevent further damage. Still, we’ll wait until morning. Resistance overnight at 2717. If the market falls in 5 waves to 2673, then we would sell a 3-wave bounce into May 22.
OVERALL: Three waves up from the 2550 area would project 2769 ideally. Possible it could happen by May 22. Lately, the seasonals have turned later lower in June rather than May and often this is after the 2nd week of June.
CYCLE SYNTHESIS: Retracing lower into early Wednesday; recovering into Thursday.
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