Daniel Urdaneta

ES/SPY/SPX thoughts - May 2015 Update

FX:SPX500   S&P 500 Index
(Disclaimer: I have posted several short ideas on ES/SPY/SPX since the start of the year - I have played some of them for quick profits, also have gotten burned a couple times; it's safe to conclude that so far, the bullish trend hasn't been broken, but hasn't accelerated either. And even if the S&P 500             just made a new closing high today, it's still stuck in the same range it has been for a couple months already. In conclusion: I'll keep trying to play the ranges until it stops working).

ES/SPY/SPX thoughts:

Stuck in a 60pt range since Early February

Signs of strong selling pressure around SPY             212 / SPX             2120

Resilience in 100-day MA as key trendline support.

Tightening Bollinger Bands signal the possibility of a big move in either direction to come soon.

Mixed signals on RSI and other momentum indicators.

The Index has gone unscathed through geopolitical distress in Europe, a slowdown in China, the blackout in corporate buybacks, and recently, a deep selloff in US Treasury bonds, thus showing the crucial importance of the Bernanke/Yellen Put in explaining stock prices.

Playing the ranges has worked wonders so far; but a shift towards a directional bet is in order (having in mind SPX             above 2125+ and under 2075- closing levels as key prices to watch).

PS: The theme of worsening macro data and technical divergence that has been extensively documented by several market analysts is still on; however, it has to be confirmed whether these factors can generate a change in direction for the US equity market.

Best of luck trading and don't get caught in the chop.
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