FOR FRIDAY (5/4) We were reluctant to chase stocks because a bounce was inevitable given the way news Algos work. White House Economist Mark Calabria commented after the first day of trade discussions in China that he was “optimistic” and that US has “discreetly” given China a list of asks and that the day ended “pretty positive.” However, what algos clearly ignored is that Calabria concluded on a slightly more somber tone, saying that “the tough part in the talks is ensuring China keeps its promises.” And that was enough to ignite the momentum into the green for the day. Thinking a secondary low day for Friday and higher next week and will get ready to buy dips. China failing will lead to the new low but not the end of the world.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR FRIDAY: (5/4) Hopefully you faded us or got something on our day-trade service, as we missed sales. The market did rebound sharply and over 40 points off of the low, and thinking Friday is a retracement to 2614 or 2607 but not a new low to 2570-74. If China lays an egg, the new low is possible. Market looks higher on Monday and Tuesday of next week and seasonals turn higher. We’re mildly optimistic now and may be long ETF positions by Monday if the market behaves. While the market went 10-12 points below our minimum target, we’re not seeing that much slippage so it still may mean the pattern is fulfilled.
CYCLE SYNTHESIS: Mostly lower into May 5; higher Monday/Tuesday; lower into May 9.
