Markets did have a pretty boring day - opening flat - and closing quite flat. No economic data were out so no "triggers" to either rally or plunge.
As more we come into this week we get more and more economic data. Thursday and Friday this week we have a lot of economic data and therefore expect some big markets movements.
What was really interesting was the change Monday on the euro and the dollar. The euro got a sell signal yesterday on daily chart with the dollar getting a buy signal.
Euro ended quite oversold short term so a possible bounce Tuesday could happend. But overall I am looking for some nasty downside in the euro and a big breakout in the dollar to come.
Still holding my SIZE position TZA 34.69 for a swing play and cash.
My view is still a MAJOR topping HS pattern to play out - as long we hold SPX below 1346-1350 then we could form a right shoulder on the daily charts. Target for the pattern is 1120-1150 area IF we break below 1250 area.
What was interesting was the VIX gave us a BUY signal too - with a move higher and higher low than Friday. So fear is moving into markets again.... which is good for bears.
Conclusion:
All in all - markets is still extreme overbought short term - take a look at my QQQ chart - literally NO support below after this runup with no pullback or consolidation - means not much support below too.... and if we dont break below 1250 over next weeks - then I would at least expect at 20-40 point pullback - so either way , watch out below... we get more and more economic data late this week + 11th July they need a long term plan for Greece (next week). I'm not sure they can make a good deal... so lets see what to come next days and weeks. Sentiment as you can see is EXTREME optimism in the short term - which mostly means downside risk to come short term...so for now - short the pops if we get some and stay cash.
Have a nice day
We are going to test at least 1352. By all means futures are testing 1345-48 right now. Fully expect a gap up tomorrow morning, especially market expect a rate hike from ECB.
ReplyDeleteThere is also indication that the payroll report will beat expectation, given the expectation has already been watered down a lot.
To me the last 2 days' price action is bullish because the bulls defended a hugely overbought market, held their ground on the face of rising dollar.
Will these factors change your forecast? Will you change your forecast at some level?