April 12, 2016
S&P JUNE FUTURES (SPm6)
2020-2021, 2004-5, 1975-6, 1956-60- Support
2063-5, 2071-2, 2090, 2102-4 Resistance
S&P Futures: Bullish until/unless 2020 violated-(Down to near Make-or-Break ) Under =2000, 1975
SPY: Bearish under 204 on a daily close- downside target 201.74, 200
US 10-Year Yields: Bearish- 1.55 near-term target- Stops 1.774, 1.86
German Bund Yields- Minor signs of Stabilization, but Bearish under 14 bps, Above leading to 24-25bp
Euro STOXX 50- Bearish- Sell rallies at 2970-85, with stops over 2985-Target 2750, 2675
HSCEI- Hang Seng China Enterprise index- Bounce should find resistance 8900-8950- Until 8950 exceeded on close, trend remains negative-Target 8350, 8260- Above 8950 allows for 9400
WTI CRUDE: Bullish- Upside targets 40, 42; trend needs to undercut 37.45 to be Bearish -important support 36.75
USDJPY: Bearish but oversold- Above 109 on a close allows for test of 111 -First Target 107.70 reached, eventual target 102
Attractive Technical Risk/reward Longs
VNTV, WMB, NAVI, SWN, LGND, MDT, KMB, SBUX, SAFM, BCR, BSX, DVN, HES, MRO, NFX, APA, ELLI, MSFT, NKE
Bullish, but extended- Buy Pullbacks- NEM, FCX, GDX, GG, TRXC, EBF, DG, CHD, OC, PM, MCD, KO, AVGO, SONC, POOL
Attractive Technical Risk/reward Shorts: BBBY, FL, MNK, NOV, AGN, P, RL, CROX, CF, VLO, TSO, FOSL, JWN, HOG, HTZ
Near-term, the trend has begun to look a bit more wobbly, specifically based on Monday's down close. The trend remains bullish from mid-February, but indices have fallen down to near Make-or-Break territory, and can't afford to fall under 2020 (S&P JUNE FUTURES) without thinking a pullback down to 2000 or 1975 occurs. Transports continue to look bearish near-term, along with Financials (during a week of major Financial earnings), and Monday's bounce in the sector didn't do sufficient GOOD to argue that the worst is over for this group.
WTI Crude remains positive technically, and until there is meaningful weakness in Crude, the selloff in Equities could very well prove short-lived, given prior correlations, ahead of this weekend's DOHA meeting. TNX and USDJPY, meanwhile have not shown sufficient strength to argue for gains in either of these, and the trend remains negative also in European equities
Meanwhile, the selloff in the US Dollar index continues, and Precious metals have begun to push up at a quicker rate, and look near-term attractive, which was written about in this week's Weekly Technical Perspective, published Monday 4/11/16. While some of the metals stocks have grown quite extended, this remains a key area of focus for the Bulls, and any selloff would provide an excellent risk/reward opportunity for adding to existing longs, or initiating new longs for gains in the days and weeks ahead. The precious metals and metals stocks remain a key area of focus right now as Longs.
Bottom line, a difficult market in the short run, with weakness in most world indices, and selloffs in bond yields, and the US Dollar vs most of the Majors. US Equities have largely gone sideways in the last week, and Monday's weakness has brought S&P down to key make-or-break. While the Weekly Technical Perspective recommended a bullish stance for equities, any break of 2020 changes that to negative for a 3-5 day selloff. Overall though, drawdowns should prove short-lived, and buying opportunities given unenthusiastic sentiment and bullish seasonality.
S&P futures down to just above key make-or-break for deciding whether a short-term selloff gets underway. UNDER 2020 would allow for 2000, 1975. for now, the trend remains arguably OK, and not too negative, despite the waning momentum and breadth
DJ Transports remain one area under pressure, and it looks right to avoid buying DJT in the short run, expecting a move back down under last week's lows before any low is at hand. The rally attempt last Friday failed to get back above where it needed to from a structural perspective and now looks vulnerable to pulling back over the next few days.
German Bund yields (10Y) have begun to stabilize near prior lows in what could allow for a rally attempt in yield terms in the days ahead. For now, given the weak equity markets and ongoing bearish trend, Bund yields would need to exceed 14 bps to have thoughts of a rally up to 24-25 bp. Until that time, the trend remains negative and Bund shorts should have yield stops down under recent lows from last week.
Gold enjoyed a sharp rally today to recoup nearly half its decline from early March. Price trends have grown more bullish, and a rally back up towards 1310 looks likely in the near-term.
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