Good Morning Traders!
Last week the indexes had three pushes down on the 60/120 minute intraday charts to end a sharp daily swing down. The SP cash found support right at the top of the previous range.
Put Call ratios have pushed back to the opposite extreme. http://www.schaeffersresearch.com/streetools/market_tools/cboe_eqpcr.aspx
The market is due for consolidation (reaction up) on the daily osc. The Russell Daily chart has had Buy Divergences and is now not too far from its daily EMA.
In the SPs, after three pushes down, a likely pattern is a corrective A-B C up (see drawn). 1930 – 33 was a previous trading range in the SPs that can serve as resistance for a short sale. The SPs closed up 33+ points off Fridays low and have used up a lot of buying power. A test back down is unlikely to make a full retest down after Friday’s powerful climax, but 1916 – 1920 was a key markup area impulse and 1920 is the area to watch for support on a reaction down.
The EC has a Sell Short day setup, while the British Pound is starting to form daily Buy Divergences. Big Picture, any consolidation to the daily EMA will set up a Grail buy on the dollar index. This may take a few more days.
Cocoa is forming daily Momentum Divergences.
Have a great trading week!
Markets in BO Mode: