Since January I’ve been bearish and I’ve been right. To possibly have to change that bias now could become a pride issue. Am I and those like me to prideful in our views to admit the possibility the market can go back into a sustained rally. Let’s look at the readings. For three months I’ve shown you the Dow vibrations, today we are looking at the SPX. In the SPX we had a 340-point first leg drop. What has that given us? It is the vibrational foundation for the next two lows.
The U.S. dollar rally continues to gather steam as it appreciated against major pairs for a third week. The U.S. nonfarm payrolls (NFP) provided little support with a miss in both the headline job number and the much-anticipated wage growth component. The main takeaway from the jobs report was the drop in the employment rate from 4.1% last month to 3.9%.
My euro bear trade hit all targets early, and I anticipated a Wave Two bounce, but the yen is the symbol tossing a three-day chart hammer candlestick my way on my projected weekly lows and Camarilla pivots (weekly and monthly), with overhead targets of 0.009250-.009300 are expected should it rally.
Are you sad to see April go? I’m not because April showers usually lead to May flowers. Am I in the Twilight Zone or did I actually see the two leaders of the Koreas hug this week? That’s incredible. If you think about it, how many times have I come here in the past year warning about some geopolitical problem on the peninsula that could blow up the stock market?
The U.S. dollar had massive weekly gains against all majors. The release of the gross domestic product for the first quarter of 2018 beat expectations but did little for a dollar that had rallied all week. Dovish central bank rhetoric from the European Central Bank and the Bank of Japan have increased the anticipation for the U.S. Federal Reserve’s Federal Open Market Committee on Wednesday, May 2 at 2:00 p.m. EDT.
As markets digest new pricing in many symbols, my pivot and range math for next week indicate sideways range plays may go on for days. So, set your scalper’s chart grids and get ready for some Iron Condor possibilities! However, some trending may occur above/below my weekly-based options perspective or symbol list.
What a very strange week. Last Wednesday the Transports led to the upside while the Dow lagged. You’ll recall the Dow lagged because IBM got clobbered on their earnings report. Also, the BKX along with Goldman Sachs flattened out. Goldman is still moving to the downside. Why is this important? IBM is the 9th weighted stock in the Dow while Goldman Sachs is number two.
The euro/U.S. dollar/U.S. dollar currency pair lost 0.34% during the last five days. The single currency is trading at 1.2288 as investors await the ECB to keep rates and quantitive easing unchanged on Thursday, April 26 at 8:30 am. Trade war fears and actual war concerns waned this week after putting downward pressure on the U.S. dollar.
The United States led a coordinated effort, along with Britain and France, to strike specific targets in Syria on Friday night. This was the culmination of what began as a horrific chemical attack carried out by forces aligned with the Syrian government on a town held by Syrian rebels last weekend.
Markets rallied to key resistance levels and have to make an important decision this week. After two weeks of testing the bottom and coming to the middle of the range, will they fade here or go to the top of the range? It’s a mixed market with the Transports gapping up to start the week, but oil seems to have found a near-term high but violated the high it made earlier in the year.