Good Morning Traders!
The market stopped to take a breather from the 5 day buying orgy. The summation tick hit overbought levels not seen since the end of December. After 5 days trading low to high, it might be time for a test down towards the daily 5 SMA. Currently this comes in at 1805.50 basis the March SPs. Oftentimes after a torid move, the market can have a liquidation flush such as the EC had on Wednesday. Whether this turns into a better swing back down on the daily charts still remains to be seen. The Dow is mid way back up as is the Russel. There is potential for a “first cross” type of sale on the daily oscillator. Additionally, the Nazdaq tested its previous high. A double top may be in place (at least on a very short term basis !) However, since the market had such strong upside momentum, a test of the 5 SMA or push below will still be a buying opportunity in the Nazdaq, and may well be with the other indexes as well. For now: main levels to watch to the downside in the SPs: 1809, 1805,50, 1802. To the upside, 1819.50 is key. The 5 SMA is similar to the 120 minute EMA. There are still grail buys unedrneath on the 120 minute charts too, so watch to see if the Sps can test the hourly EMA which comes in just above the daily 5 SMA. Gold and silver are currently on extended runs. The 2-period ROC is turning back up on the EC. Wheat has sell divergences on the daily oscillator as well as a “turtle soup” type of price rejection sale. The beans, however, have A Buy Day and have been consoldiating in a bullish fashion on the 120 minute charts.
Let’s see if the snow storm that has blasted the East coast affects volumes. If so, many markets may continue to rotate in a trading range. Happy trading! Linda