Daily Cycle Update

It was indeed a very choppy and somewhat confusing Monday for many traders. However, considering that the market fell from 1415 (Tuesday) to 1363 this morning, a little bounce of 10pts is to be expected - even though the European elections upset a lot of market watchers. The Monday closing hour was arguably a little weak, it is difficult to know if this means Tuesday will show the weakness which many were expecting for today, or if we'll see a further 0.5/1.0% brief upside.

Right now, I'm guessing we open lower Tuesday, maybe getting down to the 1350/55 level before the next intra-day bounce. Sp'1340 would seem more likely around late Wednesday/early Thursday.


IWM, daily, bearish outlook

From a daily perspective, today's IWM bounce looks pretty weak. The MACD (blue bar histogram cycle) remains very bearish, we are negative cycle..and the trend is still down - contrary to what many might have surmised as a result of today's action.


Dow, daily

A straightforward fourth consecutive loss for the Dow - although 3 of these days are only minor drops. We're still a mere 2% from last Tuesdays 4 year peak! Next target would be dow 12750, which would make for a good -250pt down day.


SP, daily, bearish

The SP' daily chart remains my favourite right now. This version more clearly highlights the rising support line - which we indeed floored at this morning. Bears clearly need a break below 1360, and that should open up a swift move to 1340. There are 'soft' levels around 1325/20, and then the big 1300 of course.

Personally, I'm still very much looking for an attempt to get down to the 200 day MA at 1276 within next 2 weeks - sometime BEFORE opex (Friday May'18).


Transport, daily, rainbow (Elder Impulse)

The Transports - which I keep noting is probably going to be the key directional indicator for the weeks and months ahead, still put in a red candle today, despite a positive close. The transports remains stuck in an extremely tight trading range.


Summary

So, for the bears it was admittedly a disappointing day. The usual overnight ES' ramp - regardless of 'why' it happened, we've certainly seen it many hundreds of a times across the last few years. This market sure does react in a twisted and illogical way sometimes (or should that be 'most' times?)

The daily H/S formation will remain intact unless we break above the RS of 1415. I would assume the 'serious money' will have short-stops around the 1385/95 level.

As noted earlier, I am short again (from sp'1373)..and holding for sp'1340.

More across the evening.