Good Morning Traders!
The market has lost its upside momentum. TICKS (basis CQG) have made three days of lower highs and lower lows. The Russel also took out the lows of an intraday A B C consolidation setting up trend reversal on the 30 minute chart. Additionally, the 120 minute SP is grossly overextended with multiple sell divergences. APPL put in a key reversal day on Friday and may well have marked the top of the sentiment swing. Bonds have also broken down and yields appear to be poised to trend back up.
For Tuesday: Watch for the indexes to test Mondays low and possibly trade below it. A zone is drawn on the SP chart above where the 120 minute EMA comes in and where prices can trade back down to.
The ECB meeting is on Thursday but much has been priced in already should there be action (note top in the bunds as well). Still, gold made a lower low while Silver made a higher low on Monday and there are buy div on the 2-period ROC in gold and silver suggesting a bit of short covering can unfold. Look for a bit of short covering in the EC as well as it had a healthy high to low day on Monday.
Lets see how the bears can dish up today!