ES/SPY Weekly Levels & Trade Prep (May22-26)
Sorry for the late post. Busy enjoying the long weekend.
SUMMARY
• ES posted a 1.60% gain last week after trading in a range of 105 points.
• ES broke through downward trendline resistance
• Price is now just below the Dec 13th high resistance
• The next upside target is the 886 Fib RT at 4310
• Strongest sectors to close the week were XLK, XLY & XLC. Weakest was XLU & XLRE
• Aggressive sectors are leading as defensive sectors lag.
• Currently rally continues to be led by the MEGA cap tech stocks
• European markets and Japan are currently making new highs.
• Earnings this week include reports from NVDA, LOW, COST, ZM, DKS, SNOW & ALTA
• Sell in May psychological effect in play
• Market already pricing in rate cuts
• Debt ceiling debate continues, but market has already priced in a resolution
• Fed Heads, FOMC minutes, PCE data & speech by Yellen are potential market movers.
WEEKLY EVENTS
Monday Fed’s Bullard, Daly, Bostic & Barkin speak
Tuesday US PMI Flash, US New Homes Sales & Fed’s Logan Speaks
Wednesday Yellen Speaks, EIA Crude Inventories, FOMC Minutes & Fed’s Walker speaks
Thursday US Initial Jobless Claims, US GDP & US PCE Prelim
Friday US PCE, US Durable Goods, US Consumer Spending & University of Mich. Sentiment
NOTABLE EARNINGS
Monday GLBE, ZM
Tuesday A, BJ, DKS, INTU, LOW, PANW, TOL, VIPS, WSM
Wednesday BNS, ELF, FUTU, NVDA, PATH, SNOW, SPLK, XPEV
Thursday ADSK, BBY, COST, DECK, DLTR, RY, TD, ULTA, WB
Friday Nothing Notable
BULLISH NOTES
ES broke through downward trendline Resistance easily
EMAs are stacked
50 SMA is above the 200 SMA
Aggressive sectors outperforming defensive sectors
Potentially positive reaction to PCE data & FOMC minutes
European markets are making new highs
Potential debt ceiling resolution
Rate pause/cut hopes
Potential positive reaction to NVDA earnings
BEARISH NOTES
Stoch 5.1 is overbought
Potential hard reversal at the Dec 13th high
Sell in May psychological effect
Potential negative reaction to PCE & FOMC minutes
Service & wage inflation is persistent
Potential shock event (more bank failures ect)
Recession fears may outweigh Fed rate pause hopes
Debt ceiling talks fail
Potential spike in yield & USD
Potential negative reaction to NVDA earnings
SUMMARY
• ES posted a 1.60% gain last week after trading in a range of 105 points.
• ES broke through downward trendline resistance
• Price is now just below the Dec 13th high resistance
• The next upside target is the 886 Fib RT at 4310
• Strongest sectors to close the week were XLK, XLY & XLC. Weakest was XLU & XLRE
• Aggressive sectors are leading as defensive sectors lag.
• Currently rally continues to be led by the MEGA cap tech stocks
• European markets and Japan are currently making new highs.
• Earnings this week include reports from NVDA, LOW, COST, ZM, DKS, SNOW & ALTA
• Sell in May psychological effect in play
• Market already pricing in rate cuts
• Debt ceiling debate continues, but market has already priced in a resolution
• Fed Heads, FOMC minutes, PCE data & speech by Yellen are potential market movers.
WEEKLY EVENTS
Monday Fed’s Bullard, Daly, Bostic & Barkin speak
Tuesday US PMI Flash, US New Homes Sales & Fed’s Logan Speaks
Wednesday Yellen Speaks, EIA Crude Inventories, FOMC Minutes & Fed’s Walker speaks
Thursday US Initial Jobless Claims, US GDP & US PCE Prelim
Friday US PCE, US Durable Goods, US Consumer Spending & University of Mich. Sentiment
NOTABLE EARNINGS
Monday GLBE, ZM
Tuesday A, BJ, DKS, INTU, LOW, PANW, TOL, VIPS, WSM
Wednesday BNS, ELF, FUTU, NVDA, PATH, SNOW, SPLK, XPEV
Thursday ADSK, BBY, COST, DECK, DLTR, RY, TD, ULTA, WB
Friday Nothing Notable
BULLISH NOTES
ES broke through downward trendline Resistance easily
EMAs are stacked
50 SMA is above the 200 SMA
Aggressive sectors outperforming defensive sectors
Potentially positive reaction to PCE data & FOMC minutes
European markets are making new highs
Potential debt ceiling resolution
Rate pause/cut hopes
Potential positive reaction to NVDA earnings
BEARISH NOTES
Stoch 5.1 is overbought
Potential hard reversal at the Dec 13th high
Sell in May psychological effect
Potential negative reaction to PCE & FOMC minutes
Service & wage inflation is persistent
Potential shock event (more bank failures ect)
Recession fears may outweigh Fed rate pause hopes
Debt ceiling talks fail
Potential spike in yield & USD
Potential negative reaction to NVDA earnings
Comment:
$ES_F finding resistance at the Dec 13th high. Needs to get above that level for bullish continuation. Green arrow would be a downside target if price rolls over further.
Comment:
Rejected hard off the Dec 13th level and in now retesting the descending trendline above green box support. A successful retest of the the trendline would be very bullish putting a break of the Dec 13th level in play. If price cannot hold above the trendline a move lower would be expected. Next support comes in at 4072.
Comment:
So far $ES_F has successfully retested the trendline after finding support at the green box. This is bullish putting the Dec 13th high in play again. Very bullish if price eventually breaks the Dec 13th high. Key that Mega caps stay strong for bullish continuation.
Comment:
$ES_F Dec 13th high target almost achieved. Expect resistance in this area. If price breaks though it would be very bullish.
