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Morning Technical Comment - S&P Up Against Key Resistance near Nov Lows

KEY BULLETS: 

S&P up near key resistance near former LOWS from Nov/Dec-  expect stalling out.. 2-3 day pullback-  Above 2005 on close for SP, this would be wrong

Gold Breakout should extend up to 1305-10 short-term

US Dollar index breakdown should cause stabilization/bounce in commodities. And Emerging Markets

Bullish Gold, Silver, EURUSD,, GBPUSD

 

S&P MARCH FUTURES- The near-term trend remains bullish, but near key overhead resistance while challenging former LOWS.. so a natural area both from a structural standpoint and Fibonacci standpoint to expect a stalling.  But a push through, would have to be respected.  So for those looking to pick spots, this area is key into early next week-  1995-2005ES

S&P MARCH FUTURES-

The near-term trend remains bullish, but near key overhead resistance while challenging former LOWS.. so a natural area both from a structural standpoint and Fibonacci standpoint to expect a stalling.  But a push through, would have to be respected.  So for those looking to pick spots, this area is key into early next week-  1995-2005ES

S&P futures have retraced about 5/8 of the prior HIGH TO LOW range from last Nov to Feb lows, 308 points, and have risen 190 points in 16 Trading days

This area is significant given the prior LOWS from December along with November , and given that S&P has moved 80 points in the last 3 trading days alone, is a key area to think prices might stall out

Positives include Uptick in momentum and breadth to show a real surge that has caused Percentage of stocks trading above their 200 day MA to DOUBLE in the last 3 weeks.  Additionally, Financials, Discretionary, Tech and Healthcare have all shown strength of late, which is important, from a participation standpoint.  Bearish sentiment is also important and even polls like DSI still don’t reflect a very bullish stance- Mid 60’s,, despite nearly 200 points of Advance from mid-February just 3 weeks ago.   Negatives include near-term overbought conditions short-term, as part of a poor intermediate-term structure.  If this is a bear market rally, prices can’t afford to move too much higher without expecting a larger rally into the Spring.    Given the surge in breadth, and the Laggard indices like DJ TRANSPORTATION AVG and NY COMPOSITE Recouping former lows, this is looking increasingly likely.   However for a 3-5 day standpoint, this area likely could hold and produce a minor pullback before the rally continues.

Also key to mention the Drop in the US Dollar and breakdown over the last 24 hours. Mostly vs Euro, Sterling, but has coincided with Gold’s breakout of its own triangle which should help Precious metals and Materials performance while EM strengthens. 

SXXP-  Europe has broken out above trend from last December and now regained former lows from last Fall.  Both are positives for the next 3-5 weeks

SXXP-  Europe has broken out above trend from last December and now regained former lows from last Fall.  Both are positives for the next 3-5 weeks

GOLD broke out yesterday and has since extended this am.  Gold should be on its way up to 1310 area in the short run, with intermediate-term targets near 1450

GOLD broke out yesterday and has since extended this am.  Gold should be on its way up to 1310 area in the short run, with intermediate-term targets near 1450

10YR Yields-  Move in the last few days has exceeded mid-Feb highs, but lagging the move in Equities which has already gotten UP to Aug/SEPT lows in yield terms, near 1.90 So, similar to Equities, Treasury yields have embarked on a short-term bounce as part of an existingbearish trend.  Today’s pop post Eco data a definite positive for yields and would expect Equities to hold up until we see evidence of yields reversing.  But given the chart below.  Upside could prove limited between 1.86 to 1.90 in the short run

10YR Yields-  Move in the last few days has exceeded mid-Feb highs, but lagging the move in Equities which has already gotten UP to Aug/SEPT lows in yield terms, near 1.90

So, similar to Equities, Treasury yields have embarked on a short-term bounce as part of an existingbearish trend.  Today’s pop post Eco data a definite positive for yields and would expect Equities to hold up until we see evidence of yields reversing.  But given the chart below.  Upside could prove limited between 1.86 to 1.90 in the short run

US Dollar rolling over when eyeing the DXY basket.. 63% vs Euro..  but also vs Sterling.. with GBP having regained former JAN lows which is a positive for GBP This COULD Affect the Broader stock market given that USDJPY is stalling out a bit..  but overall not as Dollar Bearish vs Yen right now.. and more USD Negative vs Euro, Sterling Based on the chart below.  DXY should pullback down to at least 96.25 area and then 95.. so this could be a real boon for commodities and for EM.. and Gold’s rise just in the last few days is a minor sign of this working

US Dollar rolling over when eyeing the DXY basket.. 63% vs Euro..  but also vs Sterling.. with GBP having regained former JAN lows which is a positive for GBP

This COULD Affect the Broader stock market given that USDJPY is stalling out a bit..  but overall not as Dollar Bearish vs Yen right now.. and more USD Negative vs Euro, Sterling

Based on the chart below.  DXY should pullback down to at least 96.25 area and then 95.. so this could be a real boon for commodities and for EM.. and Gold’s rise just in the last few days is a minor sign of this working