Here is the weekend look at the ES/SPY going into Mar 14 - 18th. It is more or less a copy and paste of my notes for the NAS. Both are trading in similar fashion with the S&P showing a slight edge in relative strength. The down trend continued last week with the S&P dropping 3% closing about 285 points off the Feb 24th low. Difficult trading continued with a counter a trend rally on Wednesday back into the 9 ema only to be sold off later in the week. The CPI data came in as expected and was met with muted response from the market initially, but the continued war tensions and worries that China may join the fray kept the buyers at bay.
This week traders will be waiting on the March rate decision from the Feb. Although the market has already priced in the expect 25 basic point increase in rates the market will remain cautious of any surprises. Especially during the press conference following the rate announcement when Powell's remarks will be followed closely. Along with the rate announcement we also have a serious spike in covid cases in China as well as Vietnam. Shenzhen has locked down 17mil people and is a major supply center being the 4th largest port in the world. Suffice to say inflationary pressures are set to get worse. On the positive side there are rumors of a cease fire in Ukraine. Any positive news on the war front would be very good for the market could lead to a massive short covering rally.
From the perspective of price the ES remains locked within a downward channel. Key levels are similar to the NAS. They remain the Feb 24th low and the 21 ema above. Given all that I have mentioned above the market is poised to explode in either direction. A break below the Feb 24th low could easily take us down to 4000. A break above the 21ema could easily push it up 4500. I expect the daily ranges to continue to be wide. Last week the swings averaged about 100 points. We are in unprecedented times and the only certainty right now is continued volatility and uncertainty. As I have noted before...I am limiting my trading to intraday using mostly futures and a few select tickers that I regularly trade such as TSLA & AAPL. Swings are off the table for the time being.
Weekly Events....
Monday...
Tuesday... OPEC & US PPI
Wednesday... US Retail Sales, EIA Crude, RATE DECISION & FOMC Press Conference!!!
Thursday... Housing Starts, Jobless Claims & Industrial production
Friday... US Homes sales
Notable Earnings...
Monday... Earnings from: COUP, MTN
Wednesday... GES, PD, WSM, ZTO, LEN
Thursday... CSIQ, DG, FDX, GME, GSKY, PAGS
Bullish notes...
Potential Ukraine/Russia Truce
Oversold metrics
Positive Rate reaction
Positive inflation data drop
Bearish notes...
Covid spike in Asia
Ukraine/Russia war intensifies
China Back Russia
Negative Rate reaction
Inflations pressures increase
10y yield breaks 2.10%
Comment:
Price dropped close to the Feb 24th low but has not fully tested the level yet. Getting a slight bounce Tuesday morning on lighter than expected inflation data. Bounce needs to be confirmed in the cash session.
Comment:
Confirmed to the upside. Now in the middle of the channel. I have drawn the lower time frame neutral. Price has paused at the bottom of the neutral it will either reject or push to the top of the neutral and the 21 ema. Above the 21 ema target the top of the channel and bottom of red box.
Comment:
Zoomed out look at the daily.
Comment:
ES pushed to the top fo the LTF neutral overnight into the 21ema. Looking for continuation move into the bottom of the HTF neutral (red box) and the downward trendline. Needs to break key pivot first. Any move back below 21 ema negates the plan.
Comment:
Busy week. Here' another chart. ES broke above 21ema and ran into the bottom of the HTF neutral. Will likely retest the the 21 at least. Needs to make a new high b/f going higher. Can still reject from here and go back down. Below the tan box (LTF neutral) is bearish.
