FINANCIAL MARKETS OVERVIEW
FOR THURSDAY: There‘s so much background noise going into the weekend and coming out of the weekend that it’s hard to imagine anything positive happening. Action on Thursday was wild both ways with position squaring and did not make much sense, particularly in the dollar. What is clear is that stocks are going to break the first few weeks of April and we have to get short and survive the computer trading. Not sure we have to or want to take much home but it will be difficult to position without better risk/rewards if you’re brave.
JUNE E-MINI S & P 500
S & P ANALYSIS FOR THURSDAY: (3/29) The S & P had light breakouts and breakdowns taking out 2728 and 2695 but the meat grinder action left no one happy. We had suggested partial profits at 2602 in the morning, and that worked if you managed your money to breakeven or better on the remaining. Market closed near the 20-period moving average and is a tempting sale there.
The cyclical and fundamental backdrop is weak after the holiday and it’s hard to imagine any news coming along to save this market, and so we need to stay short on position trades and hope that the thin trade doesn’t run people’s stops on Thursday. No real place to get short and manage risk, as stops need to be above 2740. Max upside could be 2737, and we can put orders in there.
Watch for a break of 2585 to relax for a more sustained breakdown. NQ looks like an easier short. Overall 2500 seems an easy target into early April but will there be more as suggested by our service over the weekend? We are concerned about war and terrorism cycles between March 30-April 12 so we would think that would upset the market.
CYCLE SYNTHESIS: Lower into Thursday; closed Friday; lower into April 2-3; recovering April 4.
