FOR THURSDAY: (5/4) We found a larger cycle that’s creating skittishness in traders into the weekend and hopes for rallies that we had seen on many markets into Friday seem like dreams. Many markets are oversold and there were key turns due at the FOMC announcement and that has us wondering. Let’s see how the morning looks.

JUNE E-MINI S & P 500
SWING TRADING RECOMMENDATION: Hold June e-mini S&P longs from 2377 with a 2378.50 stop. Exit partials at 2384.50 and 2394.00.

S&P ANALYSIS FOR THURSDAY: (5/4) The evening after FOMC is often higher but we’re concerned about failing action in NQ and lower cycles next week. We probably won’t hang around past early Thursday on longs but aren’t in a rush to sell this market. The day after a positive FOMC is often higher overnight so let’s see what develops. We’re getting toppy before employment numbers on Friday and then elections over the weekend. In the end the market will congest its way higher to 2417 if we’re patient over the next few weeks.

WEEKLY CHART: Maybe a 15% fall from June to October but a seasonal drop usually happens after mid-June. NQ has clearly needed new highs to 5666 and probably more before the S & P will cave in.

LONGER TERM: (4/26) Expecting a May high and a new NQ high unless NQ takes out 5200–and if that’s the case, we’ll get a divergent S & P high to maybe 2420. Expecting that 2150 is the most likely first downward target into September/October if the market can close below 2300. May not get the sell signal until June.

CYCLES OVERVIEW: Higher Wednesday night; sideways Thursday; lower Thursday night; sideways Friday.

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