The S&P 500 Acts Tired

And now we’re pulling back

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Our View

This week’s jobs report will be critical for the Fed rate path. I had a feeling we could see some downside and put this in yesterday’s Our Lean Section: ”I have a funny feeling, with all the economic reports, job numbers, and all the Fed speak, we could see some downside this week.” 

This was mainly based on how far the ES has gone without any major pullbacks and people being too complacent. But — and there is always a but — money tends to flow into stocks at the first of a new quarter. 

Here’s a CNBC story about the Fed having to get more aggressive with its rate cuts. I can’t deny that the Fed wants to cut rates, the question is…should they? 

MiM and Daily Recap

After Thursday’s end-of-the-quarter selloff, the ES rallied up to its 23rd new record high of the year at 5333.50, and traded at 5311.50 on Monday’s 9:30 ET open. After the open, the ES traded down to 5307.75 at 9:32, bounced to 5317.25 at 9:47, made a few lower highs, and then sold off down to 5304.50 at 10:05. It then sold off even further down to 5282.25 at 12:02 as the bonds fell and the VIX rallied. Yes, there were some pops along the way, but most of the trade was on the downside.

After the low, the ES rallied up to 5295.00 at 12:55, sold off down to a higher low at 5283.00 at 1:26, and then rallied and then slowly rallied up to 5296.25 at 3:11 and then pulled back to the 5288.50 at 3:38 and rallied up to 5294.75 at 3:47. The ES traded 5291.50 as the 3:50 cash imbalance showed $1.2 billion to buy, traded up to 5300.75  and then traded 5294.75 on the 4:00 cash close. After 4:00, the ES traded up to 5296.00 and settled at 5293.75 on the 5:00 futures close, down 13.25 points or 0.25% on the day. 

In the end, the markets were due for some type of upset, be it the drop in the bonds and notes, or crypto or whatever you want to link it to. In terms of the ES’s overall tone, it felt more like a big sell program/stop-run than big selling. In terms of the ES’s overall trade, volume remained low: 171k traded on Globex and 905k traded on the day session for a total of 1.076 million contracts traded.

Technical Edge

Guest Post — Niels at Tradrr

Fed speakers overloading the week means bonds should be kept in view.

The highest low volume area that was lost and began the drop from March’s failed attempt higher confirmed by March 12th tap at its lower edge leaving as a target should we gain back above last month’s POC.

Encompassing the previous months POC and a high volume edge formed by the wicked attempts to climb back up near the end of March marks the initial destination of this coming week as a weak level that shan’t stay as resistance if tested once more should the words from the Feds mouth spark discussion of lowered rates.

Starting the month of April weak we dashed through two high volume edges of the profile confirming little to no interest in the low volume zone between them and the first area to be reclaimed should this weakness of the first end up as a joke by the April Fool.

Economic Calendar

For a more complete Economic Calendar see: https://mrtopstep.com/economic-calendar/

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!