FOR TUESDAY: (8/14) Spillover from Turkey to South America may be the next domino to fall but global markets managed to recover. Stocks could put in a divergent low but we think the surprise will be to the upside and we’ll wait for the morning to make a final decision on how to trade.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR TUESDAY (8/14) Our sale was short-circuited by the Turkish Central Bank intervention and stopped us out for a 8-9 point loss. The market retested the 2820 region. Cash patterns made a slightly new low on the day, which is enough to complete the move down. Extended targets to 2817 or 2807 on cash or max. 2801.75 are possible and would push futures down another notch. It’s riskier to be selling now and our original work was friendly on the week and we wonder if the trade will quickly forget Turkey and South America. Will have to see how the night session comes in. Too oversold to chase down here.
CYCLE SYNTHESIS: Lower into Aug. 16-17.
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