Sentiment Timing – Morning Notes 5/11/2022

So the test of the 4055 reaction target with a high of 4065 before sellers took over.

In yesterday’s report as the spx was -20+, I said the bulls/markets look ill, but I would prefer looking for a bottom rather than shorting in this area.

We did see a reversal from -20 to +20 as the spx closed +10.

This morning we are seeing the bulls try and start the short squeeze ahead of the cpi numbers.

I do not see any sell signals on the /es, but a bad cpi number could make futures crumble in this binary market environment.

If we get in line or better than expected cpi, the squeeze will start kicking in today.

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Either way, it is short-term dangerous on the short side, with the safest trade shorting these squeezes that take place often.

Same game plan as yesterday: For today, watch the 4043 spx.

The bulls will need to get above that pivot before even considering a long side trade.

If the bulls can take out 4043, then we should see a reaction trade up to the 4065, which is a more important pivot for the bulls to breakthrough.

If the bulls can get above the 4065, we should see the short squeeze start and a reaction trade up to the 4150/4200 level.

If the bulls fail to break resistance and yesterday’s lows are taken out, then 3940/3930 is the next support zone. -Gary Dean

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 SPX Hourly Technicals

Stochastics: Oversold

Divergences: Bullish Divergences 

Resistance Pivots: R1-4043 R2-4065 R3-4095

Support Pivots: S1-4000 S2-3956 S3-3940

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