FOR WEDNESDAY: (5/23) Have to be concerned about thinning conditions as traders head toward the exits ahead of Memorial Day. We have a bias for a stock market pullback into Friday, and Tuesday’s failure supports it. Wednesday is still a transition day. We hate pre-holiday trading and have to hold back and then wait for huge release on Tuesday when everyone comes back.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR WEDNESDAY: (5/23) Disappointing action on Tuesday, as the failed double-top gave way. That would allow a retest of the 2700.50 area into the end of the week. Wednesday is a transition day so a recovery can be sold with a bias for lower action into the end of the week. Seasonally, the market is often higher after Memorial Day. If the market can’t decisively take out 2641-2, the hopes for 2765-74 may be delayed or they just may drag out into early June as the trade gets ready for Memorial Day. We always have to watch out for thin conditions as the seats empty out. Running out of time for a print of 2743-44 and a sprint higher but not impossible.
OVERALL: We’re not expecting any major fallout and a new high to 2779 or more is possible into June if the market behaves. Lately, seasonal trends have held up into the 2nd week of June.
CYCLE SYNTHESIS: Topping Wednesday; lower into Friday.