Daily Update - 02/22/2019
For the last few iterations of down hourly cycles, S&P has been limiting decline to one sharp initial down move of 30-35 points leading to oversold conditions on hourly, four hourly charts followed by an immediate sharp up move (exceeding or retesting the high) and then another re-tracement into the bottom of the hourly cycles. This sort of trading setup in down cycle indicate strength in the market. So far, this down cycle turned out to be no different - we got the down move yesterday of 34 points with RSI divergence on hourly charts followed by a sharp up move today leading S&P futures to 2795. After this there was a 13 point pullback to 2782 and another up move to close strong slightly above 2795 pivot.
Not much movement in gold, upside was limited due to down cycles, closing at 1330.65 with a gain of 3 points.
Narrow trading range in dollar between 96.28 to 96.65 closing slightly lower at 96.40. Lack of upside move during up hourly cycles indicate weakness.
Not much economic data release today. Yesterday evening, fed balance sheet update showed sharp reduction by -$47B but still at staggering $3.981T.