The S&P finished the month of April down 8.90% after trading in a wide 3% range over the course of the final week. Price dropped 2.85% on Tuesday, rallied back almost 4% on Wednesday and Thursday only to get rejected at the 9 ema and finish the week on Friday down a painful 3.64% on the day. Price closed at the low of the week just 25 points above the Feb 24th low.
Going into this week the S&P has formed the unpredictable H pattern where price has the potential to either bounce off the Feb 24th low or breakdown lower and complete a compound corrective move below 4000. If price breaks down below the Feb 24th pivot first support is at the 1.13 fib extension. I will watch this level closely as failed breakdowns often reverse in this zone. If price pushes below the 1.13 fib I will expect a move lower to the 1.27 fib extension which would complete a compound corrective move. A panic flush could take price to the 1.618 fib extension at 3800. If price reverses higher expect resistance at the 9/21 emas and the neutral zone above.
Next week we start a new month, and the news cycle will focus heavily on inflation data and the FOMC statement/rate decision on Wednesday. Much of the selling last week can be attributed to fears related to what the Fed meeting will reveal. A 50-basis point rate hike is expected but the market fears a continued hawkish tone. Any softening of the hawkish tone could lead to a massive rally. Following the FOMC the week wraps up with Non- Farm payroll data which can also be market moving. This will happen with the backdrop of earnings season. Suffice to say it will be another interesting week. It is impossible to predict how the market will react to these events so the best tactic is to keep trading time frames short and positions small as a harsh reversal may a happened at any time. It very much continues to be a trader’s market.
If you find my post helpful please give me a like. Follow me on Twitter @Sea2Sky_Trader for more updates and info.
Here is a link the the Substack of this post with more data: nine21.substack.com/...res-weekend-look-1e8
WEEKLY EVENTS
Monday US ISM Manufacturing PIM
Tuesday US Factory orders & ECB Lagarde speaks
Wednesday FOMC Statement & Rate decision, ISM Non-Manufacturing PMI, EIA Crude Inventories
Thursday Jobless Claims
Friday Non-Farm Payrolls & Average Earnings
NOTABLE EARNING
Monday CAR, CLX, DVN, FANG, EXPE, ANET, MGM, NXPI, NVOM, SEDG
Tuesday BP, BIIB, ETN, KKR, MPC, PFE, AMD, ABNB, SWKS, SBUX,
Wednesday GOLD, CVS, EXPI, MRNA, REGN, YUM, ACAD, APA, ETSY, FSLY, FTNT, MRO, UBER, TWLO
Thursday COP, CROX, DKNG, K, NET, NKLA, NCLH, PENN, RCL, SHOP, W, LCID, SPCE, WPM, NIO, MELI
Friday BEP, ENG, FLR, UAA, BLDP
BULLISH NOTES
Potential H pattern reversal
Potential softening of hawkish tone during FOMC
Positive earnings momentum
Yield reversal
PMI data points to peak inflation
Oversold conditions with VIX +30 & Put/Call + 1
BEARISH NOTES
Friday’s close was below Mar 15th pivot
Potential hawkish surprise during FOMC
Negative earnings momentum
Yields continue move higher
PMI data point to continued inflation
PUT gamma squeeze from short term traders
Continued weakness in Mega caps
Going into this week the S&P has formed the unpredictable H pattern where price has the potential to either bounce off the Feb 24th low or breakdown lower and complete a compound corrective move below 4000. If price breaks down below the Feb 24th pivot first support is at the 1.13 fib extension. I will watch this level closely as failed breakdowns often reverse in this zone. If price pushes below the 1.13 fib I will expect a move lower to the 1.27 fib extension which would complete a compound corrective move. A panic flush could take price to the 1.618 fib extension at 3800. If price reverses higher expect resistance at the 9/21 emas and the neutral zone above.
Next week we start a new month, and the news cycle will focus heavily on inflation data and the FOMC statement/rate decision on Wednesday. Much of the selling last week can be attributed to fears related to what the Fed meeting will reveal. A 50-basis point rate hike is expected but the market fears a continued hawkish tone. Any softening of the hawkish tone could lead to a massive rally. Following the FOMC the week wraps up with Non- Farm payroll data which can also be market moving. This will happen with the backdrop of earnings season. Suffice to say it will be another interesting week. It is impossible to predict how the market will react to these events so the best tactic is to keep trading time frames short and positions small as a harsh reversal may a happened at any time. It very much continues to be a trader’s market.
If you find my post helpful please give me a like. Follow me on Twitter @Sea2Sky_Trader for more updates and info.
Here is a link the the Substack of this post with more data: nine21.substack.com/...res-weekend-look-1e8
WEEKLY EVENTS
Monday US ISM Manufacturing PIM
Tuesday US Factory orders & ECB Lagarde speaks
Wednesday FOMC Statement & Rate decision, ISM Non-Manufacturing PMI, EIA Crude Inventories
Thursday Jobless Claims
Friday Non-Farm Payrolls & Average Earnings
NOTABLE EARNING
Monday CAR, CLX, DVN, FANG, EXPE, ANET, MGM, NXPI, NVOM, SEDG
Tuesday BP, BIIB, ETN, KKR, MPC, PFE, AMD, ABNB, SWKS, SBUX,
Wednesday GOLD, CVS, EXPI, MRNA, REGN, YUM, ACAD, APA, ETSY, FSLY, FTNT, MRO, UBER, TWLO
Thursday COP, CROX, DKNG, K, NET, NKLA, NCLH, PENN, RCL, SHOP, W, LCID, SPCE, WPM, NIO, MELI
Friday BEP, ENG, FLR, UAA, BLDP
BULLISH NOTES
Potential H pattern reversal
Potential softening of hawkish tone during FOMC
Positive earnings momentum
Yield reversal
PMI data points to peak inflation
Oversold conditions with VIX +30 & Put/Call + 1
BEARISH NOTES
Friday’s close was below Mar 15th pivot
Potential hawkish surprise during FOMC
Negative earnings momentum
Yields continue move higher
PMI data point to continued inflation
PUT gamma squeeze from short term traders
Continued weakness in Mega caps
Comment:
Initial relief bounce from just above the 1.13 has happened. Price is now pinned between the recent low and the 9ema. Will likely chop in this range until the FOMC rate announcement.
Comment:
Good reaction so far to Jerome's comments. Strong move after he said that a .75% rate hike was not on the table. Pushing inside the neutral right now. Expect resistance at the the top of the neutral box.
