So it really is decision time for the S&P 500. I’m thinking another false break of the high and short-term sell off back towards 2650 would wrongfoot most market players, so I am ready to position clients for that if we get the sell pivots.
June S&P 500 futures and options expiry is coming at the end of this week. I have found in the past that there is often a squeeze into expiry with a reversal back to the downside soon after. This expiry seems particularly interesting to me because of the underlying technical set up.
For the last few weeks I have been shouting from the rooftops that the S&P 500 was on the verge of a sharp correction. It has been a good case study in my trading process, so I would recommend that you review past videos and see for yourself how I came to the conclusion that the correction was imminent.
The current situation in the E-mini S&P 500 futures is a fairly rare set up with fundamental reasons backing up my expectations that a decent correction isn’t too far away.
Stocks that may come under selling pressure are gas stocks that may have benefited from an expansion of the Northern Gas pipeline as promised by Labor, and diagnostic imaging companies that ran hard ahead of the election on expectations of a Labor win.
The fact that we had a slight false break of all-time highs is an added incentive to hunt for opportunities to make some money on a correction. The market had rallied strongly on the back of the Fed rescuing the market with interest rate cuts and expectations that the US and China would ink a trade deal.
Trump may be rattling sabres during negotiations by tweeting that he will be raising tariffs this Friday. Who knows if it will actually happen, but it is a concrete sign that negotiations aren’t going as well as everyone was hoping.
I guess the cat is out of the bag that the US Fed is 100% focused on the state of the equity markets, despite their constantly denying it.
Technical analysis is just a map for yourself in an unstructured environment. It is a map of human emotion as it reflects the mistakes made by countless traders as they are shaken out of their positions across different time frames.
Fortescue Metals Group Ltd [ASX:FMG] has slumped 5% to $7.24 in late trading on Friday, 26 April 2019, giving up more gains after hitting a decade high of $8.24 last week. Fortescue has been on a strong bull run over the last few months on the back of a spike in iron ore prices...