DOWN then rally into MEMORIAL DAY,,,,

Looking to go long DOW.

AddIng to ES HEDGE LONG:
NQ LONG 13890

Annoying market.... but profitable if patient & attentive. Got to watch those charts & analyze continuously.
3 ES DAYTRADES yesterday using the 5m chart, but still prefer NQ DAYTRADING WITH 1M chart

Key developments that should provide more direction to U.S. markets later on Tuesday:
Flash May business surveys from the United States, Europe and around the world. U.S. April new home sales. Richmond Fed's May business index, Philadelphia Fed's May service sector survey
U.S. Treasury auctions 2-year notes
Dallas Federal Reserve President Lorrie Logan speaks. Bank of England Governor Andrew Bailey speaks in parliament
U.S. corporate earnings: Palo Alto Networks, Agilent Technologies, Intuit, Autozone, VF Corp

CHINA cooking the books? Did they not report great GDP data etc? Homding HANG SENG Long, losing trade, may dump it if it does not recover by Wednesday

"That lifting of the yearend rate horizon is reigniting the dollar <.DXY> - especially against China's yuan, which is hovering close to its lowest levels of the year on doubts about the strength of China's much-touted post-COVID recovery.

Coupled with anxious geopolitics following the weekend G7 summit's call for 'de-risking' of businesses' reliance on China supply chains, Shanghai stocks recorded their biggest one-day fall in a month."

From SENTIMENT TRADER:

A sub-industry signal with a perfect record since 1942
Key points:

The percentage of sub-industry groups with a positive 1-year rolling return cycled from < 20% to > 50%
After similar reversals, the S&P 500 was higher every time a year later in the post-WWII era
A majority of sub-industry groups now show a positive return over the last year

The recovery in long-term price-based indicators continues as time series like moving averages or rolling returns catch down and turn up, with most indexes moving sideways to slightly higher for almost a year.

The latest indicator to wave the all-clear signal is the percentage of sub-industry groups with a positive 1-year rolling return. For only the 26th time since 1930, the series cycled from < 20% to > 50%.

What the research tells us...

With yet another long-term recovery signal triggering a bullish alert, the weight of the evidence continues to favor the bulls. When more than 50% of sub-industry groups exhibit positive momentum over the last year after falling to a historically low level, good things tend to happen to stocks. Since 1942, the S&P 500 has never been lower a year later. If a whipsaw signal were to occur, the 1946-49 analog would be the most likely outcome.

Adam Mancini (@AdamMancini4) tweeted at 8:10 AM on Tue, May 23, 2023:

After last weeks big rally, #ES_F is now on day 3 of chop in the same range 4195-4220 range.
My target yesterday was 4220 and rejected there *3x*

Plan today: Support=4191.
Bulls want a rally here fast to recover 4197 (triggers back to 4205, 4217+).

4191 fails we see 4180, 4171

Dow at the bottom of the tight range again....

 

And careful for possible rising wedge break on Naz if 13800 don't hold...some VERY extended stocks there

 

"Four Fed presidents spoke yesterdayheres what they said:

St. Louis James Bullard was the most hawkish, backing 2 more rate hikes this year to fight inflation.

San Franciscos Mary Daly expressed the need for caution, declining to commit one way or another.

Atlantas Raphael Bostic advocated for a pause amid emerging tightness.

Richmonds Thomas Barkin remains unconvinced inflation has been defeated and declined to prejudge the June decision.

Market probabilities for a pause next month are currently hovering around 80%."

DEBT CEILING AGREEMENT today or tomorrow.
Rally for rest of week. Then big down in June.

GRIT CAPITAL:
"After 5 straight weeks of selling, hedge funds rushed into US stocks over the past 14 days.

The pace of buying was the fastest since October.

Nobody wants to tell their boss they were sitting on the sidelines - is FOMO kicking in?

In terms of positioning, short positions in S&P futures are at their most bearish since 2007.

On the other hand, asset managers are most long Big Tech since early 2022.

According to Bloombergs Simon White, hedge funds are likely net long equities."

"Four Fed presidents spoke yesterdayheres what they said:

St. Louis James Bullard was the most hawkish, backing 2 more rate hikes this year to fight inflation.

San Franciscos Mary Daly expressed the need for caution, declining to commit one way or another.

Atlantas Raphael Bostic advocated for a pause amid emerging tightness.

Richmonds Thomas Barkin remains unconvinced inflation has been defeated and declined to prejudge the June decision.

Market probabilities for a pause next month are currently hovering around 80%."

From SENTIMENT TRADER:

A sub-industry signal with a perfect record since 1942
Key points:

The percentage of sub-industry groups with a positive 1-year rolling return cycled from < 20% to > 50%
After similar reversals, the S&P 500 was higher every time a year later in the post-WWII era
A majority of sub-industry groups now show a positive return over the last year

The recovery in long-term price-based indicators continues as time series like moving averages or rolling returns catch down and turn up, with most indexes moving sideways to slightly higher for almost a year.

The latest indicator to wave the all-clear signal is the percentage of sub-industry groups with a positive 1-year rolling return. For only the 26th time since 1930, the series cycled from < 20% to > 50%.

What the research tells us...

With yet another long-term recovery signal triggering a bullish alert, the weight of the evidence continues to favor the bulls. When more than 50% of sub-industry groups exhibit positive momentum over the last year after falling to a historically low level, good things tend to happen to stocks. Since 1942, the S&P 500 has never been lower a year later. If a whipsaw signal were to occur, the 1946-49 analog would be the most likely outcome.

Not going aggressively long until Rusty clears and holds 1800, Utes clear hold 960, Trannies clear and hold 14K, XRT clears and holds 62, and Dow clears and holds 33600

 

And certainly possible all of those things could happen relatively soon unless bears start making some serious headway very soon...like maybe today.

 

But the wildcard here is the extended nature of MEGA...if those now start to break, may be hard to get those breakouts in the other stuff...

 

But if the other stuff does start to breakout after a rotation away from MEGA, would likely be pretty bullish..