S&P Mini-Futures: 4-22-07

Last week was an incredible week in the market. With economic indicators being bad, the market still went up. It went up on very low volume. Therefore, the S&P high will be reached and “conquered”. It is just a matter of time. For the last month, Monday has typically been a bullish day. This is due to acquisitions/mergers taking place on Monday. It will be interesting to see if there will be any merger/acquisition news tomorrow. Also, how will the market react to the first quarter GDP tomorrow monring? http://www.thestreet.com/markets/marketfeatures/10351942.html
Below is the Daily chart in Esignal. It shows that we are in a very overbought situation now. However, the volume is still bullish which really doesn’t signify a correction is ready to take place yet. We will switch to the 60 minutes to see what is happening during the institutional hour.
Esignal- Daily chart
Below is the 60 minute chart in Esignal. It shows that intitutions were buying at a normal volume which is very bullish.
60 Minutes future 4-22-07
Now that we think it could go higher, how far? Below is the Harmonic Analyzer graph of the future. If the futures go above 1494.00 then it looks like we are going to the next 1524.00. The S&P is only 13pts away from its all time high. The 1524 is a 30pt move in the futures. This translates to about 28 pts .
Finally, lets look at the seasonal chart. It is shown below. The first correction date 4/12 was missed. The next one is 4/23 or 4/24 which is Monday/Tuesday.
Conclusion: If you are in a bullish trade, tighten up your stop losses because this market could have a market correction very soon. The charts tell us that we are in a very overbought situation.
If you aren’t in the trade, you have to be in a swing trade strategy. The parameters for this strategy are as follows:

  • Bearish: Entry value of 1491.00 with a stop at 1494.50.
  • Bullish: Entry value of 1494.25 with a stop of 1490.50.

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