Looking at oscillators it has some chance that we see a lower high ard these levels, and that momentum turns a bit bearish again. No doubt, Bulls will try their best today to hold indexes as high as possible.
Anyway, that is already clear the long term bullish trend lost a lot of power during last two months. ADX has been decreasing to super low levels (lower and lower), DMI has been zig-zag all around on the daily chart. MACD slight negative divergence.
Meanwhile the total structure of US equity mkts has also been deteriorating. Nasdaq and Russell clearly underperforms and more and more bearish. Rotation back to safe big names? Leaders getting weaker and weaker.
Taper will go on as planned, and I really doubt ECB would launch QE any time soon, certanly not in next 2 months. So what could give a decent push to see a further extension of the long term bull market? I envision a good chance for a deeper correction in May-June. I still prefer to load June Put options and bearish Put spreads, these have time to work. Puts for E-mini SP500 are really cheap, especially compared to the options on European Indexes. (Vol. is a lot different) I do open outright E-mini SP shorts from time to time, but that can be frustrating sometimes, as this mkt clearly not favours trend trading.
Short term Key levels: 1867 / 1853 / 1838 (and 1885-1890 on the top) Major Key Support: 1820
Comments
Kumowizard
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Update:
On 4 Hrs chart SP500 makes a bearish Kumo break after retesting Kijun Sen previously.
VIX Index front contract may give complex Ichimoku buy signal on 1 Hr chart soon.
By the way Small Cap, Mid Cap and Nasdaq all look like possibly enterring a bear mkt soon. If these previous leaders bleed out, then I assume we will see a serious krach on major indexes too (SP500 and DAX as well). For sure there will be a serious fight at these levels to protect equity bull mkt. Let's see how bulls will deal with seasonal statistics. Maybe they will have to sell in May.
Meanwhile Gold is giving its gains back, and US bond curve has been flattenning on 5/10s and 5/30s. Is it an early signal that USD poised to strengthen finally either due to a general equity mkt risk off, or just on back of expectations for rates to go higher sooner?
I still don't know what will be the final trigger, it can really be anything. But the fact is anything causes the turmoil at any time, the chain reaction will be very quick.
Kumowizard
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Key levels are getting closer and closer to each other: 1867 / 1847-1853 / 1835 and 1820 last supports. If by any reason this market faces a serious bear attack, or just simply SP500 will fail to make a decisive break above upper resistance to make new all time highs, then Bulls will soon be in a huge trouble, which as time passes can happen even within a trading day's move at once.
Meanwhile regular tech indicators like MACD and Slow Stoch started to point down again, and on up days the turnover is very low compared to down days.
Of course I can not tell you what will exactly happen, I can loose most of my premiums paid if I will be wrong, but I loaded Put options (mostly June maturity) upto my possible max risk limit.
From now on I do not touch it outright, as these kind of moves what we have seen in last few months really makes me nervous. If I will be right, the bearish move will be very quick and agressive, implied vol. will pick up seriously, etc. so for me at mom it looks like best bearish strategy is holding the Long Puts.
Kumowizard
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European indexes being hit on Russia-Ukraine news trigger. Important short term technical levels broke. In line with the move SP500 just gave a sell signal on 1 Hr time frame and about to give further sell signals on 4 Hrs too. Hold shorts (maybe size them up) and hold put options too.
Kumowizard
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Update:
4 Hrs: 2 candles making hanging man, we also have first bearish Heiken Ashi candle with MACD sell signal on 4 Hrs time frame.
1 Hr (not seen on above chart): confirms bearish Kumo break soon.
Daily: Slow Stoch turning down. Watch for today's closing!!! A hanging man candle would indicate further selling for next week. Also we may be able to adjust small downtrend line if it proves to be a false break with today's close.
On 4 Hrs chart SP500 makes a bearish Kumo break after retesting Kijun Sen previously.
VIX Index front contract may give complex Ichimoku buy signal on 1 Hr chart soon.
By the way Small Cap, Mid Cap and Nasdaq all look like possibly enterring a bear mkt soon. If these previous leaders bleed out, then I assume we will see a serious krach on major indexes too (SP500 and DAX as well). For sure there will be a serious fight at these levels to protect equity bull mkt. Let's see how bulls will deal with seasonal statistics. Maybe they will have to sell in May.
Meanwhile Gold is giving its gains back, and US bond curve has been flattenning on 5/10s and 5/30s. Is it an early signal that USD poised to strengthen finally either due to a general equity mkt risk off, or just on back of expectations for rates to go higher sooner?
I still don't know what will be the final trigger, it can really be anything. But the fact is anything causes the turmoil at any time, the chain reaction will be very quick.