FOR TUESDAY: (7/31) Trade waiting on FOMC but should stocks should start short-covering here and sometimes you get 20-30 points on these short-covering moves. Still, buying is countertrend. Starting to work on set-ups for August but have to deal with first of the month craziness and knee-jerk reactions on Wednesday as well as profit-taking and positioning at the end July and first of August.
SEPT. E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR TUESDAY: (7/31) Lower profit objectives came in for big wins on our shorts and we do expect a recovery on Tuesday and a negative reaction on Wednesday. Fourth-wave bounce to 2815.50 and 2821 are possible targets. New low to 2787 or 2769 would be next too dangerous to buy overnight but there may be a countertrend buy day-trade for Tuesday but given the strong downward momentum, we’re not in a rush and it’s the last day of the month on Tuesday. Best guess is that a weak bounce overnight might lead to a new low because of end of the month profit-taking.
CYCLE SYNTHESIS: Short-covering Tuesday; lower into Wednesday; short-covering Thursday; volatile Friday.
