S&P500 (ES) Dead Cat Bounce Since Oct Low Tiring
The S&P500 (ES) is consolidating yesterday’s 1.5% plus slide, showing fatigue in the Dead Cat Bounce off the October low as ES slides back below the psychologically key 4k whole figure level and 61.8% Fib retrace of the August to October slide. Any daily close below the 50% Fib and the uptrend support (on the daily chart) would suggest that the Dead Cat Bounce has peaked or is about to in the next few weeks. For now, odds are fairly low for the Dead Cat Bounce to reach downchannel resistance (on the weekly chart) by year end. Volatility will surge with this week’s slew of news, beginning with today’s 10am EST release of US CB consumer confidence, Wednesday’s US ADP non-farm employment change, preliminary GDP, JOLTS job openings and Fed Chair Powell’s comments. The market will continue on edge Thursday with the US core PCE price index and ISM manufacturing PMI data and Friday following the US Non-Farm Payrolls (NFP), earnings and unemployment data. The escalation in the Ukraine-Russia conflict deserves close monitoring. Congratulations to paying subscribers who benefited from the Oct 18, 2022 analysis highlighting the early stages of a month plus Dead Cat Bounce, or from the February 18, 2020 analysis one day before the record high in the ES, warning of the pending slide in the S&P500. The weekly RSI, Stochastics and MACD are rallying or consolidating recent gains, weighed by the daily MACD which is trying to negatively cross. I am looking to enter long in the green zone (of the daily chart), targeting the red zone for Monday. The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I sometimes set my stops tighter). Click here for analysis on NASDAQ100, RAW SUGAR
Source: Interactive Brokers TWS
Sample of Today’s Top 3 Trades Available to Free Subscribers (published Apr 14, 2021
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