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Today´s Outlook
Weekly Outlook
On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.
The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.
Analysis
Daily:
The Daily Indicator is down. Yesterday’s close at 1050 is below 1052. It is still early in the week and price is near oversold, a technical bounce is in order off 1052 so again I would look for any attempt at 1066 and then another sell to the 1035 on higher ISSU reading.
Price is below all weekly and monthly numbers and in danger of a free fall. Sell all rallies until the daily indicator changes.
Weekly:
Price has finally indicated a sell in the weekly timeframe but REMEMBER that we still need this price below 1060 on FRIDAYS CLOSE. It is a weekly signal.
Outlook:
I personally believe the link between bonds and the equity market via the primary dealers was broken with financial regulation as I have described in earlier Newsleaks. The Fed can buy all the bonds they want but the money isn’t flowing to equities. Without this key support mechanism price is subject to a free fall.
End of week GDP numbers come out and frankly its reality time. Although GDP has moved up from -6 to -2 it is still negative after trillions in support. There is not one trader on the floor who doesn’t know it. You are going to start hearing things like ‘the recession never ended’ a lot. Frankly, until production shifts back to the US the recovery will not take hold. Income solves all current problems and without production you won’t see income.
In addition the fed is our own worst enemy. By keeping interest rates low they are preventing the private sector from allowing money flows to investment and the secondary market in finance. In other words if the investor can’t get yield money flows stop and it’s the feds own policy of low rates that is a major problem.
Good luck with your trading! |
