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Tuesday 4/3 Overnight developments, and 3 Charts of interest

Good morning-

US stock index futures have bounced from yesterday’s lows, and as mentioned the combination of counter-trend buys, a ramping up of bearish sentiment, some positive momentum divergence on intra-day charts, signs of capitulatory volume (heavy into declining vs advancing stocks ) and near-term oversold conditions all suggested a potential low could be right around the corner.  IN fact the last two days have both been “90-% DOWN days” volume wise

Overall, MORE evidence is needed to have confidence that this is happening right away.  INITIALLY  2600 needs to be recouped.  The area near the two prior lows of the last week.  Then above 2660 would eclipse 3/29 highs along with helping to recapture the downtrend from mid-March, so this would be fairly strong proof that a rally is underway and can carry prices higher.   For now, I expect a move up to 2600.. and that’s more of a “wait and see”.   .. So given the sharp downward momentum and strongly downward trending prices.. quite a bit needs to happen to have conviction of a rally.  Buying here might help get to 2600,  but until we see structural progress, rallies could be prone to failure into Wed/Thursday…  as bottoming out often is a process.   For today.  Europe weak as it plays catchup to yesterday’s US weakness.. and most of Asia also weak.  Dollar largely unchanged..and has been in a very tight range for the last week, while both Crude and Gold are also largely unchanged and not showing much volatility.     Early am Movers in MGI, CGEN, HTGM, PLUG, TEUM, X, CGNX, BTI, TSM positive and on the downside-:   SB, CME, AKER, RIGL, SWCH, LFIN

 

S&P-  Specifically for traders.  2579 on downside and then 2552 important.. while 2600-2 on the upside-  Any failure at 2600 that pulls back UNDER 2579 likely will test and break 2552 on its way to 2532-4 area

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S&P still holding above Feb lows and while yesterday is a negative price-wise on the breakdown.. there’s enough here that’s positive technically with regards to sentiment, and downside exhaustion to suggest buying in small size with stops at 2579, 2552 and Targets up near 2660

STOXX600-  SXXP index-  Europe has lagged substantially.. and after the break of the uptrend from 2016. We’ve seen some lackluster, overlapping choppy trading in recent weeks.

While from an Elliott perspective this might seem constructive.. we’ll need to see far more strength to have any real conviction that this can play catchup.  For now,  EZU, FEZ, VGK are relative shorts and a place to underweight vs US

 

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