Morning Notes 03/19/20-Gary Dean
Trading Environment-Short Term: Current Environment-Neutral
Another battle going on in overnight trading. The spx futures were +60 to -60 to -35 as I type.Even with the circuit breakers halting trading almost every day, the rate of change down is fading. There are buy signals on the 60’s and I would NOT be surprised if we close green today. The unknown right now, how are the credit markets going to hold up? That is the biggest risk to any long side trades right now-have the short term hedge funds been completely washed out yet or is there another round of liquidation calls? Many of these funds had a lot of money in the high yield corporate bonds and they can’t get out. The way they are keeping their funds alive is liquidating everything else-hence the market crash we have been reliving each week.
I have said, once we start seeing some of these hedge funds closing the doors, that is when the real low will be in place. For now, we can look at the technicals-support/resistance and trade what we see. There is a defined range for the /es as I type-2458 high/2265 low. The bulls need to get above the 2458 for a reaction trade up to 2584/2700. The bears need to get price below 2265 for a reaction trade down to 2220/2190. Please keep in mind, the lows we are looking for is a swing trade only. The direction is down, but the extreme bearish sentiment and technicals are looking for that short term low-which should see the spx rallying between 400-600 points to the upside and lasting more than a few hours. The short side could continue to work here, but the risk of being short during a face ripping short squeeze is very high-so keep that in mind!
Today’s range: (SPX) 2407 high and 2361 low. (Gap Numbers) A break of 2407, the spx should try for 2453/2529. A break of 2361, the spx should try for 2308/2281 G-
SPX CASH 60 minute Technicals
Resistance Levels: R1-2407 R2-2453 R3 2529
Support Levels: S1-2361 S2-2308 S3 2281
Trending Pivots: Lower