The Yen drops overnight and equity futures get a lift. NQ (NDX futures) now trading above its 10 DMA, although it remains to be seen how it handles Friday's 1769/1770 late day resistance (ES traders watch 1402). The Chinese news gave us a brief dip, but as was the case last week, stocks move inversely to the Yen and right now it's falling.
Don't forget contract rollover for QM/CL (crude futures). Traders have switched to May and it's trading at the pivot (59.80). Most of the noise surrounding the selling of April and buying of May has abated and now we get to see what they truly want to do with the commodity. Support was found at 59.30, 50 DMA. A drop below sets up a quick move to 58.30/58.40, confluence daily and weekly S1. If 59.30 holds, the stage is set for a more sustained move above 60.
I want to caution market bears one more time. Regardless of whether the markets "should" correct further, always take note of how many traders are leaning on the same side. Right now, it is becoming uncomfortably crowded on the bear side. We have had multiple days of ISEE readings below 100, indicating huge put buying (ISEE is calculated inversely to standard pc ratios). Investor Intelligence bear sentiment numbers are still relatively low, so we do not have enough bears yet to call a bottom, but a strong short covering rally could be right around the corner.
Don't forget contract rollover for QM/CL (crude futures). Traders have switched to May and it's trading at the pivot (59.80). Most of the noise surrounding the selling of April and buying of May has abated and now we get to see what they truly want to do with the commodity. Support was found at 59.30, 50 DMA. A drop below sets up a quick move to 58.30/58.40, confluence daily and weekly S1. If 59.30 holds, the stage is set for a more sustained move above 60.
I want to caution market bears one more time. Regardless of whether the markets "should" correct further, always take note of how many traders are leaning on the same side. Right now, it is becoming uncomfortably crowded on the bear side. We have had multiple days of ISEE readings below 100, indicating huge put buying (ISEE is calculated inversely to standard pc ratios). Investor Intelligence bear sentiment numbers are still relatively low, so we do not have enough bears yet to call a bottom, but a strong short covering rally could be right around the corner.
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on Sunday, March 18, 2007 at 3/18/2007 10:01:00 PM.
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