May 1, 2018
S&P JUNE FUTURES (SPm8)
2633, 2620-1, 2611, 2552-3 Support
2658-60, 2675-7, 2681-2 Resistance
LINK TO TECHNICAL WEBINAR from last Thursday, 4/18/18- -https://stme.in/yadt92dtNf
SPX - (1-2 Days)- Bearish- Monday should have started the decline to test and break early April lows, and it's right to use any Tuesday bounce to take profits and expect a move back lower down to 2611 initially. Resistance should come in near 2658-60 to sell
SX5E- EuroSTOXX 50- Bearish- Prices look likely to reverse course after having regained 61.8% of the prior downturn from late January. 3524 is important and over allows for gains to 3586. Below 3450 suggests a pullback to 3424 which has importance.
HSCEI- No change- Choppy and Neutral short-term. following consolidation near lows for the last month- . HSCEI requires a move back over 12450 to have a shot at a larger rally, which for now is subdued with prices locked in range-bound consolidation. Downside under 11850 would bring about a selloff.
Trading Longs: NEE, FE, TWLO, CAR
Trading Shorts: GM, HOG, STX, CBS, CMCSA, VIAB, AAL, LUV, SMH, AMAT, MCHP, NTAP, IBM, BBBY, EMN, PCAR, CLVS, MNK
Short SPY from 265, with targets down at 256.
Long TLT from 117.50-118.25, with TBT having reached targets, expecting 10-Year Treasury yields to fall after the rise to 3%
Long DBC for commodity exposure- targeting $17.85
Short IYT 187.62 with targets at 181.50
Short SMH with target 93.88-94.25
GBPUSD_ Buy 1.3895 down to 1.38 for move back to 1.45
Stocks reversed sharply Monday, largely right on time with cycles that suggested a change of trend might be near. Pullbacks under prior lows suggests that trends yet again are starting to turn negative and could result in a test and possible break of early April lows. Groups like Semiconductors have begun to weaken substantially while a miss by Apple would likely give much more conviction to the idea that selloffs have begun. Breadth worsened to 2/1 negative by the close, while Semiconductor stocks and Transports both weakened materially while Mid-caps also sold off sharply. By the close, only Energy was positive and indices had sold off to under last Friday's lows. Overall, price action seemed to fit within the framework of reversals happening into key cycles by end of month, and oversold bounces likely should be chances to lighten up for further weakness in the days ahead.
Outside of equities, bonds rallied sharply with US Treasuries following suit on the rally from late last week while the Dollar furthered gains, getting closer to key resistance which should allow for a meaningful reversal in the next week. Precious metals sank, though are very close to support which should allow for a sharp oversold rally. The next few days should be key in this regard. Overall, commodities should be close to trading lows, while the US Dollar is closing in on resistance and a push up into late Tuesday-Thursday should result in strong resistance and trend reversal for the Dollar. Gold, meanwhile, has meaningful support at 1300-1310.
Additional charts and thoughts below.
NASDAQ Composite looks to have begun its reversal to test and break early April lows with Monday's pullback under last Friday's lows. Daily patterns from early in the year remain quite "Head and Shoulder-like" and movement under 6800 would prove to be a concern for the entire pattern from 2016 lows as well as longer-term uptrends from 2009 being complete. Near-term, pullbacks from 7066 down to 6800 looks possible, and this area stands out as the real point of reckoining for this trend from January. Minor Gains Tuesday and/or Wednesday would be used to take profits, as the larger pattern is getting worse by the day. Movement back above 7350 is needed to postpone this decline.
Media remains one of the worst performing groups in the last three months, and additional downside looks likely in the weeks ahead. While lagging substantially on a YTD basis, down over 10%, Media has fared even worse over the last few months, underperforming all other 23 groups which make up the S&P over the last three months. Stocks like DISH, CHTR, CMCSA, CBS, DIS and VIAB are all down over 8% since the beginning of February, and technically speaking, more pain looks to be on the way. Intermediate-term trends have been broken for S&P 500 Media index, and last week the group severed late 2017 lows. Stocks like VIAB, CMCSA, CBS all still appear like attractive technical shorts and should be avoided technically.
Autos were one of the weaker areas in yesterday's market, and a retest of March lows looks likely before any bottom. This group made a good effort in breaking the downtrend from January earlier last month, but since has fallen on hard times yet again. Both GM and F fell more than 2% in yesterday's trading, and despite positive performance for the month of April, both look to "back and fill" in the days and weeks ahead, with the S&P 500 Automobiles and Components index falling to test areas near 120. Stocks like HOG, GM, F all look to weaken into mid-May and one should hold off on buying dips immediately, as all three look to move lower in the days ahead.