Dow Futures

I think the market action recently has been strangely constructive despite the chopping around. I don't know what the catalyst is going to be, and more frankly, I don't think it matters (AAPL earnings? Greece 'resolution'? Dovish Fed? etc...) but to me it looks like we could be on the verge of a break from this range. We have clearly been in a strong up trend for a long time (6 years and counting) but in the recent months the trade has been frustrating to say the least, so why do I believe we are ready to break out now?

If you look at the 'weekly' chart below you will see that last week we traded within the range of the week before which indicates we have reached a 'balance' a break from which should (could is probably a better choice of word) produce a trend. Since the prevailing trend is definitely up my bias is for the move to continue in that direction.

If we now look at the 'daily' chart Friday's trade was within Thursday's, again indicating we have reached a balance.

The 2 scenarios that I am going to look for in order to initiate a trade are:

1.

We enter a stop buy above Friday's high (18037) with a protective stop at Friday's low (17932) on half a position. If the market confirms my thesis the market will remain bid above that low. I would have a second stop buy above the weekly high (18072) for the second half of the position against a stop at (17774) again if the market confirms we won't fall back to the lower level. My anticipation is for the market to trade through the all time high (18270) with a target of 19000ish eventually.

2.

Quite regularly the market runs the logical spots for stops before reversing in the other direction (usually with shorts trapped). In this scenario the market won't breach my stop buys but will instead run the lows of the 'inside' day/week before reversing and closing back within the range. In this case we would look to enter long vs the low of the stop run. If this happens then i will need to revise the plan based on that information.

If the market does indeed breakout I will raise my stop to flat initially and will then operate a trailing stop on a daily closing basis.

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YM_F - 17790/18016, 17666/18093, 17465/18270

We did get the inside day yesterday, unsurprisingly, it was also a very strong one at that. In the Globex session we have taken out the high from yesterday and if we close above it that adds to the general feeling that we are going to be trying for new highs soon as things stand. LONG

GC_F - 1190/1209, 1183/1209, 1141/1223

Gold broke lower from its February consolidation and failed to reclaim the low in March, that signals a potential continuation of the move lower to me. Broke to the downside and closed below an inside day yesterday, whilst it stays below 1209 it looks a SHORT

CL_F (June) - 56.40/58.63, 53.31/58.82, 45.93/55.21

Oil did a nice monthly reversal in the May contract, we are now rolling into the June contract but my bias remains the same to the upside. We are chopping below significant resistance at the moment and took out the previous days high and low in one session, patience needed but i think we are poised to continue higher. LONG

EURUSD - 1.0712/1.0830, 1.052/1.0848, 1.0459/1.1240

Headline risk á la Greece dominates the euro at the moment (and arguably everything else). That makes this a tough trade at the moment, it seems to be trying to hold in around here but the down trend is definitely in control. NEUTRAL/SHORT

I have been a bit slack in posting my thoughts and levels here so i am going to get going again with just 3 'macro' thoughts and i will begin building on them through the week. The size relates to day, week, month levels which i am watching. I will post some charts when I have some more time as well.


YM_F - 17666/18044, 17666/18093, 17465/18270

The liquidation on Friday pushed us back into middle of the monthly range, it did result in an ugly weekly candle but since we didn't break any key lower levels the bias is still to the upside. I would expect today (Monday) to be an inside day since the range on Friday was so wide, which levels we respect tomorrow will be informative. LONG

GC_F - 1197/1207, 1183/1209, 1141/1223

Gold broke lower from its February consolidation and failed to reclaim the low in March, that signals a potential continuation of the move lower to me. SHORT

CL_F (June) - 56.85/58.34, 53.31/58.82, 45.93/55.21

Oil did a nice monthly reversal in the May contract, we are now rolling into the June contract but my bias remains the same to the upside. 60.00 seems likely to be key resistance but the recent trend continues to be higher but some patience may be need here. LONG

Gap ‘n’ grind yesterday, the move is being attributed to bad economic numbers and Ben Bernanke’s inaugural blog post. I think we are still just chopping around the same range, the tape feels nervous and consequently there is no conviction in either direction. The Dollar is now creeping back to highs and today is the last day of the Q so I don’t think we get anymore ‘conviction’ today. I am will look to be involved in any trend days that present themselves but my bias is to the SHORT side so I will keep that in mind.

$TRIB 200 sma is at 19.38, previous high at 19.69 and the big one is 20.00. Could get pushed around a bit today with Q – end but still looks good.

$SPY gap and grind higher yesterday and looks like a gap down this am. 206.96 is yesterday’s low and an area of interest the fact we are revisiting it already tells me everything I need to know. Uncertain. NEUTRAL/SHORT

$CL_F trying to hang in needs to hold 46.67 for me. 48.00 is also a key level. An Iran deal is the major headline risk for it at the moment. LONG/NEUTRAL

$EURUSD is rolling over again a retest of 1.05 seems likely. SHORT

$GBPUSD similar to the EURUSD but weaker, 1.46 seems likely. Consensus at the moment is that whoever wins the election is bad for Cable which seems odd to me but reinforces my view that the sellers are in control until at least May 9^th . SHORT

$IBB 341.49 level to watch into month end. NEUTRAL

$AAPL Still the go to asset in the market, looks like it is forming a new base (121-130) in a large uptrend. Be patient. LONG

$BABA really beaten up but trying to build a base. 87.00 is the first level to break from to confirm the base, I am looking for an entry. LONG/NEUTRAL

$CYBR is trying to setup for another move 50-55.00 is the range to watch for it. LONG

$FB held retest of the 82.00 could be just starting a larger move, may need some time but target trend days. Needs to hold 82.00 on a closing basis. LONG

$GPRO really beaten up, 44.00 a big level, has been showing signs of life in spite of the market conditions, worth paying attention to. Needs a heavy volume break to the upside.  LONG

$TWTR flushed weak longs yesterday, didn’t quite close strong enough for me to consider an immediate entry. I would suspect and hope today to be inside. LONG/NEUTRAL

$TSLA ripped on new product announcement but still v weak, continues to punish anyone that presses. My bias still very much to look for a SHORT

The market endured a terrifically flat day on Friday after a week of selling, resulting in an inside day. The futures are indicating a green open, my inclination is to look for a spot to fade the gap up into key resistance, I definitely won’t be rushing to buy. With 2 days to Quarter end we could be quite choppy but I don’t think we go too far in either direction unless something big hits the tape (Iran, Greece etc…).

$TRIB failed at its 200sma, but still holding in reasonably well considering the carnage in the Biotech space. It is equal parts frustrating  and constructive, I think a 20.00 break is on the cards soon.

$SPY inside day hi-lo 205.95-204.90. 207.00 is significant resistance, I want to fade this gap if it sets up on the 60min chart. Possibly drifts up for the next few days so be patient and disciplined! SHORT

$CL_F looks good to me if it holds 46.67. 48.00 is shaping up to be good support as well. An Iran deal is the major headline risk for it at the moment. It is in no-mans land here at the moment. LONG

$EURUSD is rolling over again a retest of 1.05 seems likely. SHORT

$GBPUSD similar to the EURUSD but weaker, 1.46 seems likely. Consensus at the moment is that whoever wins the election is bad for Cable which seems odd to me but reinforces my view that the sellers are in control until at least May 9^th . SHORT

$IBB 341.49 level to watch into month end. NEUTRAL

$AAPL Still the go to asset in the market, looks like it is forming a new base in a large uptrend. Be patient. LONG

$BABA really beaten up but trying to build a base. 87.00 is the first level to break from to confirm the base, I am looking for an entry. LONG/NEUTRAL

$FB held retest of the 82.00 could be just starting a larger move, may need some time but target trend days. LONG

$GPRO really beaten up, 44.00 a big level, has been showing signs of life in spite of the market conditions, worth paying attention to. LONG

$TWTR Frustrating couple of days as it tries to hold 50.00, I like it long term but could be market dependant. Had an inside day on Friday hi-lo 50.89-49.94, watch those levels for clues LONG

$TSLA I think any strength can be sold unless 200.00 is retaken with authority. Target 120.00. SHORT

The ease with which the market has sliced through accelerated trend lines to the downside is, as always, disconcerting. We have however only returned to areas of more significant support, if the market is truly going to roll over here then we need to start taking out more critical levels. Yesterday was a weak grind up after 3 days of accelerating selling, Janet Yellen is due to speak 15 minutes before the market closes so a low volume chop. The trend (short-term) is down so I will be focussing more on market shorts than anything else if they setup.

$TRIB failed at its 200sma, but still holding in reasonably well considering the carnage in the Biotech space.

$SPY didn’t reclaim Wednesday’s low yesterday had a high low of 206.37-204.12, the 200 sma is 201.09, the resistance above I am watching is 205.71 206.62 and 207.00. NEUTRAL/SHORT

$CL_F 42.03 certainly looks like it could hold for a while now. 54.00 is the major level above, has had a nice run for the past week. Trending up. LONG

$IBB nasty week for the biotechs but still in a huge uptrend so don’t press here. 341.49 level to watch. NEUTRAL

$AAPL tagged its 50sma yesterday. Still the go to asset in the market, looks like it is forming a new base in a large uptrend. Be patient. LONG

$BABA really beaten up but trying to build a base. I am watching for dips to buy, bit more chopping would be good. LONG/NEUTRAL

$FB held retest of the 82.00 could be just starting a larger move. LONG

$GPRO really beaten up, 44.00 a big level, has been showing signs of life inspite of the market conditions, worth paying attention to as a LONG.

$TWTR broke out and is now trying to hold 50.00, I like it long term but could be market dependant. LONG

$TSLA the mid 180s level is looming large, a break on volume targets 120.00 SHORT

The Fed successfully managed to hedge the removal of ‘patient’ from its statement by conveying the need for patience with other words, the fact that the fate of the world hangs on the wording of a statement from the Fed tells you just about everything you need to know about the state of the markets. The ‘dovish’ statement caused a USD puke and everything else followed from there. Usually an igniting bar like yesterdays is a good indicator of a new trend but I am a bit sceptical of this one. The USD has almost returned to the scene of the crime and is still in a v strong uptrend and the markets have been at best frustrating for bulls and bears for a while now. This doesn’t necessarily make the market an outright short but I do think caution continues to be warranted.

$TRIB holding in reasonably well would like to see it through 20.00 soon. I’m not sure why the 18.80s continue to present such consistent resistance but if we can leave them behind I think the stock could begin a new uptrend.

$SPY in all likelihood will be an inside day today. Edges to watch 211.27-206.62!

$IWM leading. Closed at new highs.

$CL_F big rip on USD weakness yesterday, has been sold into ever since. Unlikely we have seen the low

$AAPL cleared its DTL yesterday has joined the Dow today, worth looking at on weakness but probably leave alone for now

$BABA acting much better, I messed up the entry yesterday, looking for a new Long entry.

$FB looks like it is ready to go, needs to break 82.00 on volume. Look for a strong trend to be involved with Long.

$FEYE and $CYBR had interesting candles yesterday. Still watching.

$GOOGL is acting better, broke consolidation to the upside and is in an uptrend. I like it at 560.00

$SPWR solars were strong yesterday, this one has held its ER gap v well. Watching 32-34.00 range

$TWTR still waiting for some volume and a break of its range. Be patient.