Midday Update: 2023-03-16
Overnight weakness erased after news of First Republic capital injection
S&P 500 futures started of trading lower through the overnight session but started to firm up near the US open. What could have been a minor bounce to correct the overnight drop turned into a rally on news of a capital injection into First Republic. While technically still possible for the action from Monday to the present to be a lower degree fourth, it is probably wise to assume the alternate is taking over which treats the Monday low as wave ‘i’ and now up in wave ‘ii’. Some minor resistance at 3939 but probably should focus on the 3953 to 3967 range for a possible shallow wave ii. Bulls are in charge short-term while above 3906.
Euro seems to be on track as it corrects the drop yesterday. Resistance at 1.0702 and 1.0732. If Euro is successful in forming a lower high between now and early next week, it bodes if for an equity bounce being long lasting in my opinion.
Crude on track correcting in a lower degree fourth. There was a retest of the low this morning and now advancing toward the 69.70 to 69.90 target zone for (IV).
Bonds are reacting to negative divergence after almost making it to the next short-term overhead target of 133^21. Also had a Wave 59 9-5 exhaustion signal on that candle. Rate this as a very aggressive fade but bears need under 130^07 and later 129^04 to feel good about a possible reversal.