Waiting for NDX Stocks Index Reversal to Confirm the SPX High

By: Anthony_Cherniawski

SPX’s high yesterday at 2120.49 may have fulfilled the requirement for its final high, including a minor trading channel high. The overnight futures action did not break out above that level. The Premarket is up, but at this point only at a 50% retracement of the decline into the close. USD/JPY is declining beneath 120.00, suggesting there may be no further support from the Yen Carry trade.

ZeroHedge reports, “Having missed expectations for 5 of the last 7 months, Durable Goods New Orders jumped 4% MoM in March - the biggest jump since the July Boeing aberration all driven by a 112% surge in defense Aircraft new orders. Not surprisingly the Department of Commerce tried to pull this trick off in late 2007 in a last gasp desperate attempt to mask the arrival of the US recession then.”

NDX has not yet met its trading channel high. There is a slight divergence in the channel, leading me to suspect that it’s a Broadening Wedge. In any event, the Premarket has the NDX right up against the upper trendline and round number resistance at 4500.00 may become its ultimate resistance.

ZeroHedge reports, “Over the last three days, we have reported that some of the most important investment voices in the world are more than a little scared about the ravenous appetite for risk playing out in the market, and the fact that they have been ignored is beyond unnerving. Central banks are driving all investment decisions, and what this implies is that they are in this trade so deeply that there is no obvious or practical exit.”

TNX challenged its 50-day Moving Average yesterday along with a minor breakout. A further breakout above the 50-day and the next high at 20.09 may confirm that higher rates are coming sooner than expected.

Regards,

Tony

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