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The week ahead 15th June 2019

HI All, Hope you are having an enjoyable weekend and Fathers Day if you are a Father. Well last week was obviously a consolidation week not much action and it carved out a nice tradeable range providing a nice 282 ticks this week. So the week ahead ... Big things await ... FOMC decision on Wednesday and OPEX quarterly expiry on Friday, In the background we have the China /US trade saga and the looming G2 at end of month.


What to expect - this is a very difficult call, firstly i would usually expect some drop on Monday and then rise into FOMC this has been the course for a few years... and then a steady rise over the week to close on a high for OPEX. Looking at the big picture clearly May was a puke down and we have almost recovered, the FED will NOT cut rates so this will disappoint but as always it will be the context / language that will decide the move. So if FED say hey we will remain accommodative / we got your back that could give a green light higher into G20. I believe the FED will not cut rates until at least July i.e. after the G20 to see how the markets react to a potential no deal at the G20, this would allow the FED more wiggle room - I think this US/China trade saga is bullshit and the longer it goes on the more the Chinese will just wait - It's in their nature to play the long game and Trump will be weakened more if the stock market tanks and he is coming up for re-election next year. If the Chinese start talking more about tariffs /restriction on raw materials then the NDX/NQ could be in big trouble so as always with politics it's a game of chicken.


So the big question is do we rise into ES_F / SPX 3000 on more yes yet more hope! with some blow off top scenario over the next few weeks or do we retrace a portion of the last move up to say 2750 find support and then go for the blow off top. The week of the 24th June leading up to the G20 will be an absurd event of daily new bombs "sources said Trump and Xi were in the toilet peeing at the urinal together and therefore it's a done deal" or sources said "Xi was scratching his ass and in Chinese culture that means no deal"


Technicals

Well again we are at a perfect inflection point RSI daily 60 monthly 55 - we could see 3000/50/100 over next couple of weeks or 2637/2740. This weeks pivot on ES is 2992 so if we spend a lot of time under it i would expect more down side. The key this week will be stand aside and wait for the break. Markets are clearly in a holding pattern and we will need to patient - don't try and game the FED. I preferably like to see 2920/30 and then a drop to 2730 and a quick rise blow off into G20, the difficult think is to factor in OPEX. So i will let price dictate.


Hope that helps give an overall view of the weeks ahead very difficult to predict unlike last couple of weeks when we were due a big rally. Sit back relax and let the market come to you. TI

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