ES/SPY Weekly Levels & Trade Prep (May15-19)
ES remains trapped below the downward trendline. Hard to predict whether price breaks through or rejects at this point. Bulls & bears locking horns between expecting a rate pause or a possible recession & stagflation. Queue a bunch of Fed heads this week which may provide a catalyst to get the market moving one way or the other. Powell scheduled to speak on Friday.
SUMMARY
• ES posted a 0.41% loss last week after trading in a range of 61 points.
• ES closed the week below the downward trendline for the 2nd week in a row
• Price closed below the 9/21 ema, but remains above the 55 ema & 200 SMA
• Strongest sectors to close the week were XLY & XLC. Weakest was XLE, XLB & XLF
• Positive reaction to CPI data but neg reaction to Mich. Sentiment on Friday
• Key catalyst this week likely to come from comments by long list of Fed speakers
• Earnings this week include reports from WMT, TGT, BABA, TJX, DE, HD, CSCO, AMAT
• Sell in May psychological effect in play
• Market balancing hopes of a rate reversal with potential recession/stagflation
• Debt ceiling debate & potential US default a market risk
WEEKLY EVENTS
Monday NY Manufacturing, Fed’s Bostic, Kashkari, Barken & Cook speak
Tuesday US Retail Sales, Can CPI, Industrial Prod. & Fed’s Bostic, Barr, Williams & Logan speak
Wednesday US Housing Starts, EIA Crude & Building Permits
Thursday Initial Jobless Claims, US Home Sales & Fed’s Logan, Barr & Jefferson speak
Friday Fed’s Williams, Bowman & Powell Speak
NOTABLE EARNINGS
Monday Nothing notable
Tuesday BIDU, DOCS, HD, IQ, SE
Wednesday CSCO, TCEHY, TGT, TJX, TTWO, ZTO
Thursday AMAT, BABA, BBWI, FLO, ROST, VIPS, WMT
Friday DE, FL
BULLISH NOTES
Closed at high of range
ES above the 55 ema & 200 SMA
50 SMA is above the 200 SMA
Potential break of downward trendline
Dropping inflation pressures
Bank failures may soften Fed’s hawkish tone
Potential positive reaction to Fed Speakers
Rate pause hopes
Potential strong retail numbers (lowers recession fear)
BEARISH NOTES
Potential hard reversal at trendline high
Dec 13th high is heavy resistance
Sell in May psychological effect
Potential negative reaction to Fed speakers
Service & wage inflation is persistent
Potential shock event (more bank failures)
Recession fears may outweigh Fed rate pause hopes
Debt ceiling debate & potential US default a market risk
SUMMARY
• ES posted a 0.41% loss last week after trading in a range of 61 points.
• ES closed the week below the downward trendline for the 2nd week in a row
• Price closed below the 9/21 ema, but remains above the 55 ema & 200 SMA
• Strongest sectors to close the week were XLY & XLC. Weakest was XLE, XLB & XLF
• Positive reaction to CPI data but neg reaction to Mich. Sentiment on Friday
• Key catalyst this week likely to come from comments by long list of Fed speakers
• Earnings this week include reports from WMT, TGT, BABA, TJX, DE, HD, CSCO, AMAT
• Sell in May psychological effect in play
• Market balancing hopes of a rate reversal with potential recession/stagflation
• Debt ceiling debate & potential US default a market risk
WEEKLY EVENTS
Monday NY Manufacturing, Fed’s Bostic, Kashkari, Barken & Cook speak
Tuesday US Retail Sales, Can CPI, Industrial Prod. & Fed’s Bostic, Barr, Williams & Logan speak
Wednesday US Housing Starts, EIA Crude & Building Permits
Thursday Initial Jobless Claims, US Home Sales & Fed’s Logan, Barr & Jefferson speak
Friday Fed’s Williams, Bowman & Powell Speak
NOTABLE EARNINGS
Monday Nothing notable
Tuesday BIDU, DOCS, HD, IQ, SE
Wednesday CSCO, TCEHY, TGT, TJX, TTWO, ZTO
Thursday AMAT, BABA, BBWI, FLO, ROST, VIPS, WMT
Friday DE, FL
BULLISH NOTES
Closed at high of range
ES above the 55 ema & 200 SMA
50 SMA is above the 200 SMA
Potential break of downward trendline
Dropping inflation pressures
Bank failures may soften Fed’s hawkish tone
Potential positive reaction to Fed Speakers
Rate pause hopes
Potential strong retail numbers (lowers recession fear)
BEARISH NOTES
Potential hard reversal at trendline high
Dec 13th high is heavy resistance
Sell in May psychological effect
Potential negative reaction to Fed speakers
Service & wage inflation is persistent
Potential shock event (more bank failures)
Recession fears may outweigh Fed rate pause hopes
Debt ceiling debate & potential US default a market risk
Comment:
$ES_F has continued to fight the downward trend line. It needs to break the line and retest before bullish continuation.
Comment:
$ES_F ran right into the Dec 13th high yesterday. I'm treating this as resistance until it's not. A move above and hold would be very bullish, however, with a potential move to 4300.
