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Keeping the Pressure On

May 13, 2019

Good Morning:

Markets are once again in the throes of heightened volatility precipitated by Trump Tweets around US-China Trade Policy.

After Friday's reversal, in what was the most volatile week of the year, trade logic dictated continuation trade up and away from key psychological support (50DMA) towards 2900.

However, as I type this, the SP500 in Globex is down over 1% as President Trump keeps the pressure on China. It clearly is a news-driven, binary market with dominance, as Earnings Season winds down and Implied Correlation pivots to more macro factors, on what China may do next.

Once again, price-volume shelves and Levels (below) provide anchors for probable trade targets to navigate towards or away from.

Additionally, the Weekly Magnet when combined with the Option Implied Weekly Move, provide simple reference points for bias. For the week, the implied move is + / - 52 points or 17% implied volatility. It's likely to see a lower edge of 2829 or an upper edge of 2933.

We keep these in mind as trends are mixed, with the short-term trend down, and the weekly trend up.

Known catalysts are the large amount of Fedspeak, of course US-China Trade, Special Counsel Mueller, Retail Sales, Sentiment, Housing Starts and Industrial Production.

Updated Levels.

Have a great week.

All the best,

Scott

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