S&P 500 Futures and Stock Markets are Lower This Morning
S&P 500 futures are weak this morning, with SPY (269.74) and stock markets starting the day at support. The next major support zone is near 266.00 (+/-) VBP.
Price action is building higher lows while consolidating above 270.00 ~ 272.00.
TICK cumulative finished the previous week with a bearish cross, so institutions have been selling. Most likely this price action is nothing more than the end of quarter selling by funds looking to accumulate cash for the second half.
Oscillators are oversold and turning.
As mentioned in the weekend video newsletter, we will wait for the opening range before considering any new positions from the watchlist. Mixed signals persist, suggesting there is no edge at the present time.
Blocks must be monitored to gain some insight into what institutions intend to do, as many stocks promise to open lower this morning. We view this as an opportunity, so long as the cavalry shows up.
MarketSmith Growth 250 stocks we are watching. AR, CLUB, EGAN, SKY, and MODN. Additional names in the energy sector COP and HES are worth a look as well if oil and gas hold these levels.
MODN is in the Life Science and Technology software business.
Money flow and momentum oscillators suggest institutions are buying the stock. We are anticipating a breakout of this consolidation pattern. A measured move is approximately +3.50 points to start, with a (23.00 +/-) target in the short-term.
Traders looking to hedge S&P 500 weakness might consider AGG, SHY, GOVT, VBTIX or TLT. Bonds will move higher as yields retire to lower levels. That said, we need to see how the day plays out.
Wait and be patient. Smaller position size is a good idea until institutions show their cards. We should mirror what they do to start the first week of the new quarter.
Caution is warranted.
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