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08/14/19 Morning Notes

SPCFD:SPX   S&P 500 Index
Morning Notes 08/14/19-Gary

Trading Environment-Short Term: Current Environment-Bearish

Hi Everyone,

Sentiment Update from Woody: "Sentiment cam in today at 90% bullish after the big news yesterday but as we see nothing has really changed. There are still profiles for lower but the most important message may be just pure volatility both ways."

Yesterday is looking more and more like a massive short squeeze based off of hope that the US/China can work out a deal in the next 2 weeks. I mentioned it in last night's video report that the only way we strike a deal with China, is if President Trump pretty much folds on at least 75% of what he is asking for from China. If tariffs continue to get placed on China goods, they are holding a gun as we are throwing stones at them. China owns 5% of our debt and is the single largest holder of the 22 trillion dollar debt.

If we ever got into a full blown trade war with China, they can simply toss that 1.1 trillion the hold back to us, which would pretty much cripple our economy and the world economy. I don't believe it will ever come to that, as they also have time o their hands. Elections are in 15 months and I do not believe we will be in this trade war with China come 1 year from now and I do not believe it will be China that folds to demands made by President Trump-it will be Trump that folds on 75% of the demands and calls it a victory, because he got 25% of what he was looking for-and that is better than what any other President has done. Tariffs will be removed and we will be pretty much exactly where we started before all of this took place. I am NOT an economist and this is just me thinking out loud-so if dead wrong, that is my excuse ;)

The /es is trying to hold the 2888 support and if they lose that, we most likely will be testing yesterday's lows. With the talk of a recession because of the inverted 2/10, I don't believe it will hold if we get down there and 2851 would be the next stop. The /es bulls need to get price back above 2914 to get themselves out of harms way. If they succeed, then I believe we test yesterday's highs and most likely head to the 2950-ish area. This doesn't have to be today, just pivot levels and reaction targets if support/resistance breaks.

The SPX looks like it is going to open close 2885 bull/bear line and if that is taken out, I think we could see 2866/2845 in a fast manner. The bulls will have to push price back above 2918 to gain short term control. We are pretty overbought on all time frames and there are now bearish divergences on the 60's, so the ball is in the bears court, let's see if the Fed or some other news saves the day again. 2720 has been and remains my downside target-where I do expect a massive short squeeze rally to hit, before the next leg down starts. That is a ways away and many things can change, so that is just an observation, not a trade recommendation.
Today’s range: 2899 high and 2884 low. (Gap Numbers) A break of 2899, the spx should try for 2908/2918. A Break below 2884 should try for 2873/2862/2850. G

SPX CASH 60 minute Technicals

Stochastics: Overbought-ish
Divergences- Bearish Divergences
Resistance Levels: R1-2899 R2-2908 R3 2918
Support Levels: S1-2884 S2-2873 S3 2862/2850
Trending Pivots: Lower
interesting view
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