April 18, 2018
S&P JUNE FUTURES (SPm8)
2684-6, 2662-4, 2655-6, 2636-7, 2620-1 Support
2718-20, 2724-6, 2747-50 Resistance
LINK TO TECHNICAL WEBINAR from Thursday 4/5- https://stme.in/tBobOtxUYL
SPX - (2-3 Days)- Bullish- S&P now getting closer to areas where a stallout is possible, after 7 of the last 10 UP days. Until evidence of exhaustion and/or trend deterioration occurs, the trend remains bullish, and it's thought that 2740-50 is possible into 4/20, 4/23 before reversing lower..
SX5E- EuroSTOXX 50- Make-or-break for Europe on the upside- Can't be broken - 3500 without expecting additional gains to near 3575-3600. For now, still expect this area is important and can hold.
HSCEI- Make-or-Break after pullback- Breakdown from trendline resistance keeps trend down and now a necessity to hold 11680, or else this results in a larger break which would violate uptrend from last May. Important for immediate stabilization.
Trading Longs: VEEV, SPLK, VRSK, WYNN, ROL, WIX, MPC, PLNT, DBC, FXB, NDAQ, TJX, STZ, BURL
Trading Shorts: VNQ, XLU, AZO, EXPE, TSCO, HOG, LUV, UUP, EUO, SIG, FL, BBBY
ACTION PLAN- No changes heading into Wednesday but on evidence of stalling out, might revisit
Long SPY with initial targets 270, then 274.25-275
Long DBC for commodity exposure- $16.94 with targets $17.85
Long GBPUSD with target 1.4370, 1.50
Long IYT with target 195
Long ITA with target 205.50-206
Long XLK to 67.24 up to 68.20 this week
Long GLD 125-126 adding above 127 with targets initially 129.50, and stops 125
Short VNQ with expectations of a test of 72.65 and breach which could lead to 70- Stop at 76.70
Short XLU with targets down at 47.88-48.25, Stop at 51
Ongoing bullish uptrend and follow-through still ongoing, but still lackluster price action out of Financials which is a concern unless we can see some signs of Financials starting to catch up with Technology into end of week. S&P is now nearing what i believe is important price and time based resistance to this move which could come about into the time from 4/20-28, and key area to focus on will lie just above current levels into Friday and/or the following Monday of next week at/near 2740-50, so its right to play for this area in price and/or time and look to sell into gains by end of week. Trends are bullish, but getting overdone and we're now seeing intra-day charts growing closer to showing signs of Demark based exhaustion. Daily charts however, which take precedence for the larger trends, remain bullish and early to fade given the lack of weakness
Technology has continued to show decent strength and the NASDAQ has broken out relatively vs SPX , so given the percentage of Tech representation in the SPX, should keep any downturn to a minimum for at least another 3-5 trading days. Outside of the Tech space, the key area of focus lies with the Gold and Silver miners as Precious metals have begun to show better than average relative strength of late and the Middle East uncertainty coupled with weakness in the Dollar should bode well for gains into May in metals and Metals stocks. Gold looks attractive for outperformance and Gold miners are an area to overweight heading into late April/May, thinking that this group should shine.
Additional charts and thoughts below.
S&P has now extended up to the first area of interest, near 2710, and intra-day charts are beginning to line up to suggest the possibility of this stalling out in the short run. (However, most 60, 120, 180 and 240 minute charts along with daily still pinpoint 4/20-7 as producing a change in trend. Movement that breaks this 3-day uptrend should hold 2660 if this rally is still intact, and then turn up further towards 2730-50. For longs, the first area of downside support lies at 2684-5 and then below at 2662-4. S&P cannot break 2660 without thinking a larger pullback could get underway. For now, it's still right to be bullish going into Wednesday unless this trendline is violated, but one should use the first break as a chance to buy dips into end of week, as the larger area of price and time resistance still looks to be higher.
NASDAQ Composite has now broken back up above important downtrend line resistance vs the SPX which is thought to be bullish for Biotech and Technology shares, and still looks to have upside in the days to come. This bodes well for our thinking that Technology's bounce could help stocks hold up without much pressure into next week. For now, any minor pullbacks should create opportunities to favor NASDAQ for outperformance into the end of April before any peak.
Gold and gold stocks should still be favored in the days/weeks ahead as they've been trading quite resiliently despite what's thought to be the end of the current Syria strike. Given the recent downward pressure on the Dollar and Rates still churning over the last month, Gold and precious metals remain attractive and GDX is an ETF which offers attractive long exposure to the Gold miners group. Further gains look likely in GDX, which should manage to exceed $24.25 in the next couple weeks. One should consider positioning long in Gold mining shares.. and momentum, trend support this view.