..new catalyst time
Thursday, May 19, 2011 at 05:59AM As speculated heading into week,..”…it would not surprise if the market fills the late April gap as spillage from the recent erratic commodity/ currency trade may finally hit the broader equity market….”....and alert later at ES 1318 Tuesday morning for a bounce oppy’ has produced a ~22 SP handle reversal so far..“… the late April gap in the (1315 is mid of range of gap) ….This gap is looking more and more like the place to reverse. (~5% correction from 2011 highs). “ Post Monday trade, at SP1329.
Allowing the market to hit the gap (1313-1319) basically priced in worst case scenario in FOMC minute speculation (recall SP was 1360-1370 at when the story surfaced). Once the market saw no ‘timing’ on exits this afternoon, it was business as usual….”Hawkish bias would be if timing 'signals' of exit strategy were noted” (yesterday), Besides a few gyrations in the USD/EURO cross post release, the single best revelation was the Euro/USD actually remained steady. Hopefully, today was another day this week that showed equity markets may not be at the mercy of the cross for every second of the day.
The quick reversal has put the market a few points from 20ma and the top of the May down trend-line (1345-1348), so you’d expect some ‘R’ here and therefore some consolidation before any chance to move higher. Broad market consolidation does not mean single stocks can’t outperform and one of today’s positives was the money flows into Shadowlist ~95% green/ small cap names. Also, banks/brokers hung in digesting weeks gains is a positive.
IPO’s, (Glencore here in UK and Linkedin in US) on Wednesday should go off well and keep market pre-occupied with a positive bias.
Note, you can trade single stocks/ sectors going forward, but we are still below our health 20ma barometer, plus this May down TL is signalling more downside into June/ summer as of now, so don’t get carried away just yet. Time for that will come after summer into year end, big time probably.