FOR THURSDAY: (5/11) We have a bias toward stocks bouncing on Thursday and would love to buy a pattern completion but still looking for 40 ticks off the highs on NQ and not sure what will create that. The dollar looks higher all week and that doesn’t jive with a 2-day bounce for gold, which isn’t happening either. Luckily the news front is relatively clear compared to past weeks.

JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.

S&P ANALYSIS FOR THURSDAY: (5/11) Not much change from this morning with tight ranges in 10-point band. Last night we had suggested that at least a 17-point pullback to 2383 was starting and we hit 2387.50 overnight. NQ needs to fall 40 ticks off of the highs before it can rebound to new highs. Yes, the trade will sell even numbers at 2400 on the S & P and 5700 on NQ 100 but we do expect them to be taken out next week. Market easily will do a 3-wave bounce to 2394.50 with channel resistance up to 2397.50. Three waves down only needs to go to a minimum of 2386. Chances are the market is probably a buy for swing traders on Thursday if we can buy in the 2383-6 region and there’s no major fall-out.

WEEKLY CHART: Maybe a 15% fall from June to October but a seasonal drop usually happens after mid-June. NQ has clearly needed new highs to 5707 and probably more before the S & P will cave in.

LONGER TERM: (4/26) Expecting a May high and a new NQ high unless NQ takes out 5400–and if that’s the case, we’ll get a divergent S & P high to maybe 2420. Expecting that 2150 is the most likely first downward target into September/October if the market can close below 2300. May not get the sell signal until June.

CYCLES OVERVIEW: Higher into Thursday.

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