Hello Everyone,
Quick Note: After getting very extended, the major indices all put in red candles on Wednesday and today we saw more downside reversion back toward the 9 day EMAs. Today the SPX started out with some choppy range bound trading in the morning and then drifted lower into the early afternoon that encompassed a couple of quick throwback rallies that failed near VWAP each time. During the afternoon chop and boring trade, I posted to be mindful of a possible swoosh during the final hour of trade IF support (SPY 456) was lost and right on cue the market went from dull drip to a sudden plunge. Quarter end fireworks indeed.
The market was very stretched which favored some reversion which has unfolded over the past two sessions. Tomorrow kicks off Q2 (April Fools Day) which historically has a bullish tendency. I still favor a higher low to be established at this time (4th wave) with the initial target 4525 being a 23.6% Fib retracement nearby. There is a band of support in the low 4500s down to around 200 day MA below. For ES, the bulls will need to reclaim 4565 to get some upside momentum going. I will present a possible roadmap below in the charts.
The hedges mentioned recently served their purpose as stated below.
Continue to monitor the various inverse ETF's as hedge candidates with a valid trigger.
Note: Several previous ideas on watchlist remain valid but simply have not yet triggered so continue to re-examine each night. Consider making a fresh top 10-12 setups each night and put on front page along with existing trades. My advice is to keep your total ideas to a manageable number. Lastly, it's best to wait at times for valid setups to form - sometimes less is more. Big moves tend to occur first and last hour and overnight sessions.
Please take a moment to look at the trade ideas.
