FOR WEDNESDAY: (4/19) Whippy action on Tuesday with the UK call for June 8 elections causing a lot of unwindings in currency positions, as short pounds were suddenly not the place to be. Whippy action likely to continue for a week based on cycles, more saber-rattling and war cycles with North Korea and the “forgotten” debt ceiling crisis that has a deadline for April 28. Will be hard to put in too many orders overnight but we have to on some level.
JUNE E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S&P ANALYSIS FOR WEDNESDAY: (4/19) S & P held 2330 for the secondary low and the pattern would suggest a move to at least 2350 and probably 2357-8 before it could come apart again—and that isn’t a definite. Cycles are mixed but more cycle lows dominate into Thursday but they may not be strong enough to create any major damage unless saber-rattling turns ugly. It’s possible that if over the next week, 2318 does not come out than the divergent high to 2417 will manifest and NQ has clearly needed new highs and is stronger for a May high. We do think war cycles are tense through next Tuesday and the chance of someone stupid pulling the trigger is very possible and whether the market will like it or not will depend on how many defense stocks you have.
OVERALL: We have seen enough of these sucker-punch situations to not hold out hope for 2302. If we’re going to get another push lower, we may see 2357.50 first. Without the close below 2318, the market still has some ways to make divergent highs to 2412-17 into May and that may not be off the table. The market thinks war is good for the economy usually. The surprise will come if China or Russia get more active in the fray.
LONGER TERM: (3/27) Still can’t officially say we have a weekly chart sell signal until 2300 comes out on a closing basis. It may be a while before we know if a weekly chart top is in. 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 June if the market can close below 2300.
CYCLES OVERVIEW: Congesting/lower into Thursday; higher Friday.
