A Blow-Off Top in Oil?
The intense overnight action is a fitting start to the week.
Technical Edge
NYSE Breadth: 35% Upside Volume
NASDAQ Breadth: 29.5% Upside Volume
The markets are off the overnight lows, which is a positive development for the bulls, but it was a busy Globex. Stocks fell, oil ripped and gold cleared $2,000 an ounce.
That said, the S&P still looks like it could be set for a retest of the lows, if not a larger move to the downside. This week will be an important development. We have a clear upside hurdle at 4400. On the downside, 4275 has been key lately.
Game Plan
We’re going to see what holds and what folds this week. My main question is, do we get a decline into the Fed next week and a “sell the rumor, buy the news” reaction? AKA selling into the Fed announcement and buying after the rate hike?
S&P 500 — ES
Feel free to extrapolate this layout to the SPY.
There’s no need to jump out of the gate on Monday morning at 9:33 ET. It’ll be a long week. Pick and choose your spots carefully and let’s make smart trades!
We can see the overnight action penetrated last week’s low at 4251.50 before bouncing. The ES needs to regain the VWAP measure from the Feb. 24 low, currently at ~4315.
We went over the pattern for the S&P on Sunday, as the S&P 500 been a nice winner for us lately. The question is, does the 61.8% rejection result in another test of the lows or do we have another leg to the downside (making it a five-wave correction?)
Here are the key levels to know now.
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Economic Outlook
