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WED NIGHT- PRE ECB Thursday AM- Eve 3/10/AM-3/11

1)      No change in thinking on direction.  S&P remains stubbornly range-bound trading in a 15 point  Neutral range-bound consolidation ahead of the ECB Thurs..and FOMC next week, awaiting signs of BREAKS of this range, which would be used to follow prices directionally.  The texture and shape of this consolidation typically suggests an UPSIDE move, given the choppiness of the range near the highs(Whereas most peaks show much moresigns of falling immediately from spike highs..  grinding near the highs however, often can lead to a final push up in fourth-wave consolidation type efforts)   Defensive stocks continued to lead on Wed, with Utilities, Staples gaining ground.  See the breakouts back to new 52-week highs lately in KO, GIS, PM and the Safe Telecomms- VZ, T

Breakouts above 1994 in S&P FUT would lead to tests of 2008 and above , and given the fact that so many are EYEING this area at 2000 for SPX as being important, with many having taken to betting that this might be the top of the rally from 2/11 lows,  a move back up above the highs could very well result in a CHASE ahead of the FOMC, where prices above 2008 could easily run to 2025-30

B)       IF 1976 is broken, which isn’t expected, but if we see an hourly close under 1976, it would be much more likely that a move down to 1935-40 could occur, so steps to hedge movement would be taken in the event that prices break down

2)      Meanwhile… ECB on deck for Thursday am-  Most leaning very dovish on expectations for further expansion by ECB to help jolt Eurozone out of its deflationary spiral.. cutting deposit rates into even more negative territory while expanding Asset purchases.    10 bp Deposit rate cut, while increasing monthly purchases by 10 bill EUR..  Goldman’s team Doubling down on their short bet ahead of the meetingwith their forecast at EURUSD 95 cents in 12 mths, and thinking Draghi’s action could prove much more severe given the December events.    EURUSD very choppy of late, but 1.08 important support.. until this is broken, there stands a chance for this to move higher-

3)      Energy in constant focus as Crude has defied most predictions about falling, despite a record 66.9 mill Cush inventory and rising 8 of 9 weeks in DOE stats.. yet most seem to be focusing on Gasoline draws as we reach that part of the season-  Technically, Crude has now traded around this 38 area for 3 straight days after the attempted breakout, Tuesday’s about face, and then Wednesday pushing back up to highs.   A rise above 38.40 would cause a further extension in an already stretched rally for WTI, but WOULD likely cause S&P to follow suit given the recent correlation, so worth watching.   Watch also the move in NATTY GAS-  UNG turning up sharply and near-term still looks to move higher

For now, difficult to fade Crude and this week’s highs are key resistance to keep an eye on

4)      USDJPY something which has correlated strongly with S&P and has begun to look much more positive since the beginning of FEB-  , this has taken a sharp turn higher Wed evening ahead of Thurs ECB-   the pattern from early February resembles an Inverted Head and Shoulders pattern with a neckline near 114.50 .   Movement over that level would be likely strongly positive for US Equity markets given an over .60 correlation with stocks in the last year.

Stocks hitting new 52-week HIGHS:   KO, GIS, EIX, DTE, CMS, PM, RGR, PLCE, SMG, SWHC, SYY, VZ-   Pay attention to this week’s breakout in KO, PM, and recent moves to new highs for the Telecomm- VZ, T

Stocks with biggest percentage DROPS which look likely to extend lower:  SHORTS-   UEPS, BLUE, FTR,  KODK,  Z,  REGN, NTRI

15 min Chart shows S&P very much range-bound, but move above 1994 post Draghi allows for test of 2007-8

15 min Chart shows S&P very much range-bound, but move above 1994 post Draghi allows for test of 2007-8

S&P-  Choppiness and grinding near highs typically isn’t all that bearish technically, but a break below 1976 would have to be respected.  For now, a better chance of a move up above 1994 to 2008. And above that, coinciding likely with USDJPY moving up along with Crude extending gains and TNX, would be quite positive for the short run

S&P-  Choppiness and grinding near highs typically isn’t all that bearish technically, but a break below 1976 would have to be respected.  For now, a better chance of a move up above 1994 to 2008. And above that, coinciding likely with USDJPY moving up along with Crude extending gains and TNX, would be quite positive for the short run

These are the key areas that MATTER for EURUSD-   1.08.   then early Dec lows right above 1.05.    On the upside 1.14.   Pattern appears quite choppy and very difficult to make a strong directional call..  but given the Dollar decline of late, it would seem like EUR SHOULD trend higher, which would run in the face of what many are expecting. Until 1.14 is exceeded, (which would be quite Bearish DXY and Bullish for Gold) the pattern is largely range-bound and it’s necessary to watch if 1.08 is violated

These are the key areas that MATTER for EURUSD-   1.08.   then early Dec lows right above 1.05.    On the upside 1.14.  

Pattern appears quite choppy and very difficult to make a strong directional call..  but given the Dollar decline of late, it would seem like EUR SHOULD trend higher, which would run in the face of what many are expecting.

Until 1.14 is exceeded, (which would be quite Bearish DXY and Bullish for Gold) the pattern is largely range-bound and it’s necessary to watch if 1.08 is violated

CRUDE_Above 38.40 would allow for a quick test of 40+ before this consolidates but would be quite positive for the pattern with Crude having exceeded the downtrend and being BACK up above former lows from last Aug Above 38.40 would cause an acceleration and parabolic move, which would be short-term a likely time to sell for trading, but on an intermed-term basis, a reason to think Crude reaches the high 40s before any move back lower. For now, despite all the fundamental arguments about why CRUDE SHOULD move down.. the pattern has definitely not reversed hard off of this 38 level

CRUDE_Above 38.40 would allow for a quick test of 40+ before this consolidates but would be quite positive for the pattern with Crude having exceeded the downtrend and being BACK up above former lows from last Aug

Above 38.40 would cause an acceleration and parabolic move, which would be short-term a likely time to sell for trading, but on an intermed-term basis, a reason to think Crude reaches the high 40s before any move back lower.

For now, despite all the fundamental arguments about why CRUDE SHOULD move down.. the pattern has definitely not reversed hard off of this 38 level

USDJPY--  Pattern taking the shape of a Reverse Head and Shoulders which could be resolved by a move back up over 114.50 This would be likely quite positive for US stocks given the past correlation trends-   I like Bullish USD positions vs Yen and would ADD over 114.50

USDJPY--  Pattern taking the shape of a Reverse Head and Shoulders which could be resolved by a move back up over 114.50

This would be likely quite positive for US stocks given the past correlation trends-   I like Bullish USD positions vs Yen and would ADD over 114.50

Natty turning uphere is UNG.. which at 6.24 looks to be able to reach former lows near 6.90 at a minimum...    buy and risk .20 to make .65

Natty turning uphere is UNG.. which at 6.24 looks to be able to reach former lows near 6.90 at a minimum...    buy and risk .20 to make .65