QE, Buy-Backs, BTFD, and Fed Rhetoric Save Markets
Hey guys, I hope everyone had a nice relaxing weekend. After a freakish drift higher on the US majors yesterday toward the ATH's, and off the back of a week straight of buy-backs, QE, and dip buying, the SPY is back at the lower band of the ascending green channel (resistance) around 420. Of course, we can't not mention the FED members parading around every day, spreading more transitory-inflation rhetoric to boost sentiment and cool yields.
On SPY, we recently saw 2 tests of the 50DMA, first on May 12th, and then again on May 19th. But, we saw strong support, just as we have in the recent past. I expect a rejection at this level, similar to the rejection we saw on May 14th at outside channel resistance. We have initial downside to the 21EMA at 414.25, and then, of course, a retest of the 50DMA is likely this week around 408.50.
On the Nasdaq (QQQ), we're sitting at 334 pre market as of 9AM, and likely to retest the high from Feb 16th around 338 before getting a rejection. The momentum is to the upside as the 21EMA, 50DMA, and 100DMA has been recaptured. The Russell (IWM) is sitting just at the 21EMA around 221, with the 50DMA just above us at 222.34, and the 100DMA just below around 219, and the Dow (DIA) is sitting at the top of it's recent range, and within a couple percentage points of the ATH.
Gold has been levitating just above the 200DMA after the recent dollar puke, and spike in bonds, while Bitcoin (BTCUSD) recovered slightly to a 37k handle after the insane 54% crash that we all knew was coming. WTI (USOIL) is sitting around 66 and showing resilience as FED burns the dollar back to an 89 handle.
The Vix is sitting at 18.2 after retesting the descending trendline we broke through on May 11th. We hit a low of 16.9 this morning around 7AM, but are poised to recapture the white ascending trendline around 18.6, with 18.8 resistance back in play.
Finally, the US10Y yield is being sold off as the FED down plays inflation as transitory, and although the cup and handle formation is still potentially going to materialize, based on previous tests of long term resistance, it may be several weeks before we see a breakout.
I just want to say thanks again for everyone's patience last week as I took some time off, it was a rough week. My cat Franco was in and out of the vet, and had his final surgery which went well, thankfully. Then my dog Pompey died. When it rains it pours I guess, but he was 18 years old, and had a great life, so I'm finally smiling now when I think of him instead of crying. Time to get back on track. :)
Our live analysis begins at 9:30AM. Cheers, Michael.
On SPY, we recently saw 2 tests of the 50DMA, first on May 12th, and then again on May 19th. But, we saw strong support, just as we have in the recent past. I expect a rejection at this level, similar to the rejection we saw on May 14th at outside channel resistance. We have initial downside to the 21EMA at 414.25, and then, of course, a retest of the 50DMA is likely this week around 408.50.
On the Nasdaq (QQQ), we're sitting at 334 pre market as of 9AM, and likely to retest the high from Feb 16th around 338 before getting a rejection. The momentum is to the upside as the 21EMA, 50DMA, and 100DMA has been recaptured. The Russell (IWM) is sitting just at the 21EMA around 221, with the 50DMA just above us at 222.34, and the 100DMA just below around 219, and the Dow (DIA) is sitting at the top of it's recent range, and within a couple percentage points of the ATH.
Gold has been levitating just above the 200DMA after the recent dollar puke, and spike in bonds, while Bitcoin (BTCUSD) recovered slightly to a 37k handle after the insane 54% crash that we all knew was coming. WTI (USOIL) is sitting around 66 and showing resilience as FED burns the dollar back to an 89 handle.
The Vix is sitting at 18.2 after retesting the descending trendline we broke through on May 11th. We hit a low of 16.9 this morning around 7AM, but are poised to recapture the white ascending trendline around 18.6, with 18.8 resistance back in play.
Finally, the US10Y yield is being sold off as the FED down plays inflation as transitory, and although the cup and handle formation is still potentially going to materialize, based on previous tests of long term resistance, it may be several weeks before we see a breakout.
I just want to say thanks again for everyone's patience last week as I took some time off, it was a rough week. My cat Franco was in and out of the vet, and had his final surgery which went well, thankfully. Then my dog Pompey died. When it rains it pours I guess, but he was 18 years old, and had a great life, so I'm finally smiling now when I think of him instead of crying. Time to get back on track. :)
Our live analysis begins at 9:30AM. Cheers, Michael.
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