- E-mini S&P March gains could not be sustained as we tried to retest the all time high and prices collapsed in a straight line to 4650. The negative candle on the daily chart increases risks that we have formed a negative double top for a sell signal.
- NASDAQ March unexpectedly shot higher on the Powell minutes as far as strong resistance at 16400/450. Shorts here worked perfectly with a high for the day.
- E-mini Dow Jones March could be building a very large head and shoulders reversal pattern over the past 5 months (despite the mid week bounce) but it could take a few weeks to complete the right shoulder.
Today's Analysis
E-mini S&P risks are increasing to the downside as selling pressure emerges on a retest of the all time high. I am seeing potential head & shoulders patterns in other indices so I am increasingly concerned about a significant move to the downside. First support at 4650/40. Be ready to sell a break below here targeting 4620/10, perhaps as far as 4590/80. Further losses perhaps next week are likely to target 4550/40.
If you want to but the dip then look for longs at first support at 4650/40 to target 4680/85. I think gains are likely to be limited but above here we can look for 4700, perhaps as far as 4720/25. Bulls need a weekly close above 4745 to kill the negative signals.
NASDAQ shorts at strong resistance at 16400/450 work on the slide as far as support at 16850/750. I think longs are risky but if you try, stop below 16725. (Small risk). A break lower is a sell signal targeting 15560/530. This is the best chance of a low for the day but a weekly close below here is a sell signal for the start of next week.
Gains are likely to be limited with first resistance at 16180/220. Unlikely but if we continue higher expect strong resistance again at 16400/450. A break higher is a buy signal targeting 16600/650 before a retest of the all time high at 16767.
E-mini Dow Jones first support at 35600/550, second support at 35300/35200, although the outlook is quite negative so be careful if you are buying the dip. A break lower is a sell signal targeting 35000, perhaps as far as 34700.
Holding first support at 35600/550 allows a recovery to 35800, perhaps as far as the 36000/100 high for this week. An unexpected break higher targets 36150 before a retest of the March high at 36330.
Video analysis: