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Monster Stimulus-Bear Rally Engages- Mar 25, 2020

MARKET COMMENTARY-Market participants continue to rally here as the stimulus package of extraordinary size gets put together. We could be sitting on a slingshot move right back to the upside as short scramble and big hands jump back into the market. However, we are more likely to follow the 2008 scenario where we rallied into the stimulus getting signed and then collapsed again after the bill is passed. The market is turning and we will have churn in any rotation.

The song remains the same – though confidence in the dollar will weaken after the extraordinary measures of buying treasuries and mortgage securities expansions have created a buying frenzy of short sellers covering and money managers not willing to miss out after the first run they missed- markets will fade once more – this time to higher lows as we recover. As I mentioned yesterday, we could be looking at a spike that measures several days. We are in uncertain times and the fallout remains unknown. We have slowed some selling and markets are trying to settle in and weigh in on what it means to have Central Banks throw everything they can at the problems at hand across the world. Short selling of government bonds remains illegal and a dollar starved world will trade their currencies in for US dollars. Whipsaws remain the name of the game. Let your bounces confirm. Trading these markets takes significant skill – and just because there are opportunities, doesn’t mean you have the chops to do it.

WEBINAR LINK IS IN THE PROTECTED AREA OF THE BLOG – Please login and scroll down for the link.

WEEKLY PRICE ACTION
Monthly support has both shifted down with and now sits at 2086.5. There is a level below near 2024 that has now shown up as a potential level below. Resistance sits at 2380 and 2524, with 2707 above that. Demand and supply shock is worrisome, and we will continue to sell big bounces until these are resolved. Remember, in bear rallies bounces can last for days.

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Sharing links for each of the charts we follow that (if you have ThinkorSwim) you can load directly onto your charts.
NEW LINK FOR TODAY’S TRADING DATA EXCEL SPREADSHEET

Individual TOS Chart share links for ES_F , NQ_F , YM_F , CL_F , GC_F

REMEMBER, WE ARE USING PROVEN SUPPORT AS LONG ENTRIES AND PROVEN RESISTANCE AS SHORT ENTRIES IN THIS MARKET– If those levels have passed you, simply walk your targets up the levels noted on the spreadsheet as the next entry as long as trend prevails.

WEBINAR LINK FOR THE WEEK BEGINNING Mar 23, 2020

WEBINAR RECORDINGS ARE AVAILABLE BY REQUEST

COMMODITY & CURRENCY WATCH
Gold is on the run again over 1640 as the play by the Fed weakens the dollar and central banks across the world buy up gold. Charts are choppy still with WILD and WIDE swings. The US dollar is up at 101 and holding after testing near 103. Currency markets remain very volatile. WTI fell to 21$ but is now struggling at 24.

TRADING VIEW & ACTION PLAN
We are still looking at choppy news-driven with deep fades and high spikes by momentum traders who give us trading ranges that are large. Bearish at the first passes from resistance to support. Levels near 2174 to 2357 make the wide ranges of support where we are seeing players and the 2580-2707 range looks like front line resistance for now. Traders will be whipsawed trying to engage, so choose wisely.

The theme of INTRADAY motion is: BREAKDOWN with swift and savage bounces into resistance levels that get pressed higher and return to deep support due to momentum trading.

POSITIVE AS LONG AS WE HOLD ABOVE 2716.5ish (with big spikes likely with shallow fades back into breakout)

CHOPPY BETWEEN 2174 AND 2707.75

NEGATIVE AS LONG AS WE HOLD BELOW 2504 ish today (with sharp bounces failing and deep pullbacks holding)– choppy inside the range.

Follow short term trend and momentum signals while in the intraday trading environment and watch for weakness to develop away from your trade direction in order to leave. Please log in for the definitive levels of engagement today.

TARGET RICH TRADES

METASTOCK SWING SHORT – in play – nasty formations near the bottom here. Take profit at new lows – short is still engaged green diamond says to trim gains at the lows.

METASTOCK SWING LONG – a reversion to the mean formation showing as potentially completed.

Intraday LONG trading from support edges like ABOVE the VWAP or tight moving averages will give you the least risk event for engaging – removing your trade at resistance will allow you to participate – understanding that countertrend bounces can be swift and sharp but will likely fail under the broken structure of the market.

Intraday SHORT trading from resistance edges like the old highs or bigger moving averages will give you the least risk event for engaging.

Follow the candle trend until candles stop breaking higher.

Here’s a link to the METASTOCK software

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