Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
Global stock market look soft this week.
Between the media trade banter, Month/Quarter end re-balancing and the Easter holiday-shortened week things can happen, even nothing much, as many Wall Street traders are on Spring vacation.
Expect quiet on the G-10, and data fronts given the light economic calendar, I will be here to see and comment on the action, exciting or not.
Looking at last week
Friday the US indexes rallied then reversed, and there were no bids in the afternoon as, traders left early for the Easter holiday.
Monday we watch to see if the DJIA and S&P 500 February lows act as support and bring on a bounce.
The setup is there, the historical pattern is there, enough leaders are still in decent enough patterns to put forth a serious leadership effort if DJIA and S&P 500 are close to reversal marks. And if The Bears are out of pocket, we will see it in the leadership.
Even if there is not a reversal move, there will be a rebound move and/or a relief move. And remember after this much selling the play is to the Southside after a relief move fails.
You have to play close attention if at your desk this week, as you always take what the market gives.
The Bulls Vs The Bears
VIX: 24.87; +1.53
VXN: 28.35; +1.72
VXO: 24.70; +2.59
Put/Call Ratio (PCR) CBOE: 1.54; +0.32
The Bulls Vs The Bears
The Bulls rebounded on optimism, the Bears rose on pessimism, meaning the Bulls are more Bullish, and the Bears are more Bearish.
The Bulls are at 55.5 Vs 54.9 last
The Bears are at 16.8 Vs 15.7 last
How things look technically in this correction phase
S&P 500 looks similar to DJIA, as they have moved together though DJIA is the weaker.
S&P 500 is on the February closing low and the 200-Day SMA, and putting in a potential double bottom just over the 78% Fibo retracement of the September to January rally.
Closed on the low, but there is no indication of a bounce her, but there is important support at this mark. A dip/recovery to a Doji or better is a good bottoming indicator.
NAS Comp broke its December to March trendline and is 72 pts from the longer term trendline from early Y 2016.
It is also closing in on the 50% Fibo retracement of the September to January run. That trendline is
important, particularly if DJIA and S&P 500 fall early this week and reverse of the February lows.
The NAS could put in a low higher than the February closing low.
Note: it is important to start looking for reversals after the kind of selling we have seen, particularly when the indices get near the prior selloff low.
Not playing is as if it is different this time.
Have a terrific week