Trading Edges That Last
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Lawrence's Comment Recap Similar to Dow and Nasdaq, ES did nothing much during the week. Closed the week at midpoint. Outlook Unlike Dow or Nasdaq, ES has a clear overbought breadth reading ...READ MOREFor more information about this report please refer to the Market Bias Informant pageREAD MORELawrence's Comment Recap Opened the week above Y+1 and staying above invalidated the potential for a drop back down to Y-0 and below. Fed announcement sent cable to Y+3 normal breakout target ...READ MORELawrence's Comment Recap Inside week consolidation around Y-0. Closed the week below Y-0 and midpoint. Outlook The downside retest of Y-1 has not happened yet so it is still in the card ...READ MORE
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S&P 500 May 27 to May 31 Outlook
Lawrence’s Comment
As oppose to a pullback consolidation, ES gave us an all out blowoff top resulting in a fast 50+ points selloff. Messy price actions since. Due to holiday Monday coming, volume dropped significantly on Friday. Closed the week below midpoint and near Y-0.
Outlook
A strong case for a long term reversal is in place. But landing a close above Y-0, even though marginally, is not that bearish short term.
Classic pattern suggest a pop at least back up to B-0 which is conveniently the 50% mark of the 50 points selloff. The fight within this B-0 down to B-1 zone will be very fierce as bulls have been in control for so long it will not give up easily.
The big question is whether a more significant pullback is in the making. There are several magnets below that will be tested. It is just a matter of time. Key levels are 1600, 1500 and then 1400. As long as the 1600 level holds, ES can stage a bottom on weekly for at least a retest of year high in a month or two.
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