Sentiment Timing – Morning Notes 4/6/2022

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Futures are under some more selling pressure after getting shellacked yesterday.

I have been saying that downside momentum would not pick up until the 4550 was taken out and if it gets taken out (yesterday) a reaction trade down to 4500-ish would come quickly.

I will admit, I had some doubts yesterday, as to whether the bears had it in them or not and placed a cap on the short position from 4550 at 4640. Yesterday’s big drop and today’s follow-through makes managing the trade a lot easier.

Simply place the stop at 4550 and look to scale out of a piece of the position at pivot levels.  My downside target from the short entry has always been between 4450-4400 and we should be getting close to the “mini panic line” at 4500 near the open.

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If the bears can keep the momentum going and press the spx below that pivot, we should see 4465 become a magnet in a fairly fast manner. I will be looking to take 1/2 of my short position off at/near the 4465 support and leave 1/2 with a stop at entry 4550.

I do believe we will see the 3800/3500 this year, being the economy/fed/inflation are all major headwinds for the bulls and I don’t see that going anywhere.

The inverted yield curve should hit high valuation/flying stocks more than others.

Watch your NFLX, GOOG, FB, and AMAZ if this trend continues (I think it will) they have the most exposure to higher interest rates.

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But honestly, I don’t believe there are many sectors that will be safe when all is said and one in this “destroy the world economy” to build it back better plan that is in place.

Commercial Real Estate will be the next major shoe to drop, but I have no real time frame as to when, but will go over that in more detail at a later date. -Gary Dean  

SPX Hourly Technicals

Stochastics: Oversold

Divergences: Possible Bullish Divergences Today

Resistance Pivots: R1-4540 R2-4552 R3-4570

Support Pivots: S1-4500 S2-4480 S3-4462

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