Look For The Reactions Today
Today’s economic calendar is booked with
PPI, Retail Sales and Michigan Sentiment, so we should have ample stimulus to
provoke reactionary movement in the market. With the war in Iraq pretty much
over, it will be interesting to see how traders and investors react to the
economic and earnings news coming out, and should help give a clear indication
as to the health of the rally we’ve had since March 12.
During times of rangebound trading and
an indecisive market, it usually helps to take a step back and assess the larger
picture in order to gain clarity. Below you will see a weekly chart of the SPX
that illustrates a potential triangle that may be forming. This coincides with
the fact we’ve seen volatility grind lower, and it is now at multi-month lows.
Triangles are very difficult to trade in
their early stages since it results in swings back and forth as the trading
range establishes itself. The good news, however, is that once the move out of
the pattern commences, it is usually sharp and decisive.
Let’s also narrow down to a 120-minute
chart to gain an intermediate-term idea of what is going on. Note how key 860
has been in the S&P futures. Holding this level is crucial for upside potential
to remain intact:
Have a great trading day.
Bo Harvey
Feel free to email me with any questions
or comments at: bo@aspentrading.com.