Tax day is upon us. This day often marks a turning point in the market. Take last year, for example, we were all freaked out by the ultra-violent marketplace. Then, as if a switch was turned, we gracefully ascended from about tax day thru to 4th of July.
This year we have little to fear. Markets are behaving well, the Russell is undergoing a major breakout, and oil has a bid. My hypothesis of a down week calls for Wednesday strength, thus I will stick with my cautious theme.
The Nasdaq trader higher overnight after catching a bid around 3am. No particular economic event stands out at that time. Around 10pm the China GDP data came out in line and on deck for today we have Industrial Production at 9:15am, NAHB Housing Market Index at 10:30am, Crude/Distillate Inventory at 10:30am, and Fed Beige Book at 2pm.
Intel traded higher last night after reporting, BAC is slightly lower after their premarket earnings. On deck this evening are NFLX and SNDK, while C, and GS are set to report tomorrow BMO.
Taking to the chart, we can see the 2-way conditions present. We started the week continuing to explore higher prices. By mid morning the market managed to find sellers and roll. That selling continued into Tuesday before managing to print a decent looking low (excess wicks on candles) before firming up into the close.
Heading into today, my primary expectation is for action early on to fizzle out relatively soon and put us into a holding pattern ahead of the Beige Book. Look for sellers to work into the overnight inventory and test down to 4397. Here I will look for buyers to step in and take out overnight high 4410.75 to target 4414.75 before two way trade ensues.
Hypo 2 buyers take out 4415 early and set up a leg to 4435.25
Hypo 3 we test down to 4381.50 – 4378 before finding buyers and balancing out below 4398.Twitter