S&P 500 (SPX) breaking above 2,730 opens room for rise to 2,788 – 2,759; if S&P 500 pivots below 2,720, we can expect a move back down towards 2,645, says Ziad Jasani in video and commentary.
View my video Market Strategy Session May 14, 2018:
Global Equity Markets Swing-Low-Formation May 3 & 4 slowed into last week’s end:
• Indecision candles presented on major indices = caution vs. adding to Equity swings
• Front-End of week better chance to see USD & Treasury soften and Equities to try to advance; signal = S&P 500 > 2,730 and staying above headed to 2,788-59.
• Pivot to stronger USD and rising U.S. Treasury yield potentially May 16 with Eurozone Final CPI
• Focal U.S. trades: SPY, QQQ, DIA, XLV, XBI, XPH, XLB, XLI.
• TSX breaking above 16,095 opens room for a rise to Jan. 4, 2018 Highs (16,421).
• If the TSX swings-high under 16,095-55 we can expect a re-trace to 15,775-718.
• Focal Canadian trades: XIC-T, XIU-T, XFN-T, ZEB-T, ZWB-T, XMA-T, XGD-T.
• If the S&P 500 (SPX) can continue the bounce > 2,730, short-term opportunity to play EEM, FXI, ERUS, EWZ, EPI (Emerging Markets) opens up, only if we see stability in EMB (Emerging Market Bonds) with price holding above $108.72 Continued Focus on our Bond, Preferred Share, Precious Metals and Currencies on the other side of the USD trades into week of May 14.
U.S. Jobs Data (May 4) & CPI Data (May 10) printed weaker/cooler which supports a short-term cooling of a very over-bought USD resulting in the following behaviors:
• USD↓ (UUP < 2.984%).
• Bonds↑ (TLT, LQD, XBB-T, AGG).
• Preferred shares (CPD-T, PFF).
• Precious Metals↑ (GLD, CGL-T, SLV).
• (USD) UUP < $24.23 is the next macro-signal to add to the above trades Oil break-out above $69.56 opening up a move to ~$72.50 to $73.
• Oil break-out linked to politically unstable producers missing out-put targets (Venezuela, Libya, Nigeria) along-side fear of a renegotiation of the Iran-Nuclear-Deal
• Trading Energy-Equities on a momentum basis only with tight stops
• VIX (Volatility) at dangerously oversold point:
• As the U.S. market bounced from May 3-4 we have seen VIX move below its 200-day average and close < 13; a natural spot to either expect complacency and a melt-up to carry forward or a spike of volatility and a move down on equities Eurozone economic data decelerating/deteriorating
Global growth theme dissipating/transitioning – all central banks on other side of U.S. more dovish.
• Attraction to the USD over Q2 vs Euro, Yen, Swissy.
• Focus on U.S. equities for out-performance.
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