Yesterday afternoon I shared some insight on a potential bearish reverse of the S&P 500 Index after a nearly 10% advance in less than a month (‘S&P E-mini Gives Warning After 9.5% Advance’). Other asset markets appeared not only to have supported the strong bullish advance in S&P’s, but also gave additional signs yesterday of confirming some change in general market sentiment.
In early trade this Friday morning, the S&P is slightly higher after having technically signaled a bearish reverse in the ‘bearish engulfing’ formation on my candlestick analysis. A settlement above 2163 today would tend to discount the bearish implications of this recent price action.
Treasury prices this morning are lower following price action yesterday that showed potential bullish reverse out the curve. Bond, Ultra Bond and back month Eurodollar futures formed ‘bullish hammers’ on probes to or below recent price lows. These patterns would need higher price action and settle today to confirm any near term bullish prospect.
Gold too had a recovery yesterday and nearly formed a bullish engulfing following a 5% decline from the multi-year high. Currently gold, seemingly a strong performer on the back of geopolitical unrest lately, is lower today. At 1323.7 as I write, a settle below 1323.6 would negate the bullish implications of yesterday’s advance.
Of the most recent 160 visits to my ‘Diagnostics By Candlelight’ blog, Russian area interest has accounted for nearly 40% of this traffic. This is something I have not seen before. Most visited posts recently have been ‘It’s a Brand New Funding Market…Again’, ‘Where to be Long and Short U.S. Fixed Income’, ‘S&P E-mini Gives Warning After 9.5% Advance’ and ‘Treasuries Fighting Wrong Battle?’.