May 8, 2018
S&P JUNE FUTURES (SPm8)
2660-2, 2650-2, 2631-3, 2591-3 Support
2681-2, 2690-1, 2710, 2718-9 Resistance
LINK TO TECHNICAL WEBINAR from last Thursday 050318-https://stme.in/p0sloRP6EO
SPX - (1-2 Days)- Bulish- S&P closed down at important hourly support near Tuesday'sintra-day lows, but structurally, momentum along with the broader trend, is getting worse. a defensive stance is preferred, with breaks of 2623 resulting in an immediate test and break of 2611 on its way to the mid-2550's.
SX5E- EuroSTOXX 50- Bullish- Further gains out of Europe which is continuing to move at a quicker pace than S&P- Expect eventual move up to 3659 in SX5E
HSCEI- Neutral- gains in the US Dollar seem to have held back HSCEI, and for now, prices still choppy and rangebound over the last month- Pullback to lows of one-month consolidation looks likely and a test of 11750-11800. Over 12361 now needed to think trend is turning back higher.
Trading Longs: ETFC, IBKR, TWTR, NOW, NOV, COP, OXY, CRM, RHT, SPLK, CSCO, ENTA,
Trading Shorts: CAH, URBN, BBBY, KSS, TAP, LL
Long SPY with targets near 271
Long OIH 27.33 with targets 29.50
Long XLK 68.11 with targets 70.31
Long GLD 124.59 with targets 128.36 initially
Equities managed to push higher above 2670 and briefly hit 2682 resistance before settling, but managed to give back gains following Trump's mid-day tweet Monday. Despite the mid-day selloff, trends remain positive and should continue to extend in the next couple days. The positive devlopments of exceeding this downtrend outweigh any negatives into the close, and breadth still finished around 2/1 positive. While Energy pulled back from earlier gains, both Tech and Financials managed to extend greater than 0.60% and this is thought to be positive for markets given these sectors heavy weightings.
Thoughts on S&P, OIH and EWG below
Additional charts and thoughts below.
S&P broke out above the downtrend from mid-April and got up to, but not over resistance at 2682 that was thought to have some importance. this area near late April highs remains a significant level to overcome, though trends don't show sufficient evidence of rolling over to think Monday's minor intra-day pullback was all that important. Thus, it remains a positive day in having gotten up above this downtrend, and right to stay long into Tuesday/Wednesday of this week. Above 2682 lies 2690 and then a move to challenge mid-April highs might be possible before reversing course.
WTI's spike higher above 70 faced a mid-day about face, but still closed up above highs of the last couple weeks and as OIH shows, this move still achieved a minor breakout, despite the extent of the pullback intra-day. It's right to be long energy, expecting further upside, and Trump's press conference to discuss at 2pm on Tuesday should provide further details. When not considering Trump's actions, but looking purely at OIH and WTI, this still is a bullish move and warrants being long.
Europe, and in particular, Germany, has turned up sharply in recent weeks and still looks to have upside potentially to near former highs. Long positions are preferred in EWG, thinking that German equities might have upside to near 13,450 in DAX from current 12948. Momentum is not yet overbought to the levels that suggest selling, while Demark counts remain 3-4 days away. Thus, a close near the highs of the day is constructive to buy EWG, expecting near-term gains.