Diary of a Financier

Intraday update: Make or break

In Capital Markets on Tue 4 Jun 2013 at 13:54

In a thin tape intraday, a big seller in S&P 500 E-mini Futures ($ES_F) led this market from as high as +50bps to -90bps (currently). Key short term support levels have been achieved in major equity indices, and whether or not those levels hold will make or break this market.

$SPY’s 15-minute chart shows a bull flag nearing support with 1x bull divergence:

SPY 15-min

SPY 15-min

$IWM shows a more definitive bullish bias, with a bull pennant already resting on support with a more developed 2x bull divergence:

IWM 15-min

IWM 15-min

When I get strong signals of a reversal–particularly swing trades like these–I always look for echoes of affirmation in other broad indices, asset classes, or styles. This one checks out, but I await technical confirmations in about 48 hours…

–Romeo

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  1. Like clockwork, we got our bounces in both indices after this entry. As of 16:00 NY close:
    $SPX -0.55% (low -1.03%)
    $RUT -0.86% (low -1.52%)

    Trendline supports were maintained, and bull divergences continue to mature. In all likelihood, tomorrow will allow the bull reversals to keep developing, with confirmation not coming until later in the week:

    $SPY’s buy signal rests above $165 trendline resistance (+1.0%).

    $IWM only needs to rally >$99.0 trendline resistance (+1.35%) to reach a breakout, which isn’t far when you consider the 20bp arb spread at the close ($IWM -1.06% vs $IWM.IV -0.87% vs $RUT -0.86%).

  2. […] valiant attempt to rescue this market from a correction, $SPY epically failed to follow-through and confirm a bull reversal today. The 2007 analogue continues to prove itself a worthy guide to the market, so […]

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