Monday Prep

Apologies to my regular subscribers for the extended break in service, I've been renovating my house for the past few weeks and living in a building site, but I'm finally back to some normality again! 

The weekly chart below also shows the monthly profiles. Although March so far remains inside of Feb's range, we've seen a downtrend begin on the weekly candles as trade re-enters the thinly traded 2290-2230 area.

The daily chart below shows continuation from the impulsive move lower last week and the short term balance of the past few days. It's also the first time the market has held below it's 50 day sma since before the election. The next major area to test below is where the market broke out in Feb, around the 2290-95 zone, and then the low for Feb at 2277.50.

The break lower overnight has left initial resistance at 2331.50-33.50. Acceptance back above that zone will trap shorts from overnight and could see a move back towards Friday's settlement at 2344.75. It remains to be seen if we are going to get more of a reaction from the healthcare vote failure on Friday and have a bigger liquidation - I would expect it to, however, if overnight inventory has got too short we may see a correction to that before sellers step in again.

So far the overnight range is 2317.75-37.50 on above average volume, along with a drop in the dollar, bond yields and crude. In terms of trend, the monthly is neutral and the weekly and daily time frames now bearish.

Zones I'm using for today are below, with the short term bull/bear zone at 31.75-33.50. Holding below 31.75 increases the chance of further liquidation to test the breakout area from last month. Holding back above the bull/bear zone puts the market back inside last week's balance area where we could see responsive sellers step in at the zones above.