Momentum beginning to wane as trends broken in S&P, RTY heading into a data heavy week- With PCD Price index and personal income/Cons Spending income coming in roughly inline with no real change in Equity futures, we see S&P down about 7 ticks from levels hit just prior to the time that Europe typically opens (Closed today for holiday) along with WTI Crude, while Treasuries, gold largely unchanged. USDJPY has now trended higher for the last 8 of 9 days, and we find out that near record Long positioning in the Yen remains, as an additional 3.4k contracts added to make the total 82.8k long, nearing the highest levels since 2008- (Given the correlation to SPX, this Speculative long positioning is important, and means that a move up over 114.50 is more likely before 111 is broken again anytime soon.
Barron's over the weekend detailed Bullards comments going against the grain of what he said just a few weeks prior in February when he warned against rushing towards normalization, but just 3 weeks later suggested that April might be on the table, along with a few other Fed governors. This confusion with multiple Fed talking heads going against what the Fed just reiterated in February might offer additional uncertainty. Fornow, this week's data important, but Friday looks to be the key day for economic data with the NFP report.
However, The risk/reward for US Equity indices is looking increasingly poor in the short run heading into the last week of March, and last week's trend break coinciding with gradual momentum loss could produce 3-5% declines into early April before a move back to new all-time highs occurs. While the trend between now and late May still favors a good likelihood of SPX pressing up to test and exceed early November 2015 highs, it's getting more difficult to think this will occur totally uninterrupted. Last week's break of trendline support followed by the snapback should provide market bears with an attractive risk/reward to short into this move with stops near last week' highs. Look to use last Thursday's rebound to consider portfolio hedges as a good risk/reward in the near-term while using last week's highs as a stop.
Just in the last few mins, we've seen some evidence of CRUDE turning down below 39.40, or down nearly 1% from earlier peaks, and equities should be watched carefully for signs of following suit- Key for WTI lies at 38.30 which if breached, would certainly lead equities lower given the correlation-
Overall for Monday, 2040 and 2048 important as resistance, while 2026, then 2012 as support- Breaks of 2012 should lead to a 3-5 day correction, which seems increasingly possible given the late March tendencies for seasonality
CRUDES decline in the last 20 minutes has just broken earlier day lows. Both CRUDE and S&P peaked around 345 this am