5/5/22 (Cinqo de Mayo).
Overnight: Whooshka!
Dow Jones +2.81%. SP500 +2.99%. Nasdaq +3.19%. Small Caps +2.66%. Banks +3.35%.
America's Federal Reserve raised interest rates by +0.5%, with more of the same to come.
It's not the news that matters but the market's reaction to the news that matters! And last night - the market went WHOOSHKA after the dreaded +0.5% interest rate happened.
This looks to me like a continuation of the reversal day on 2/5/22 which trapped a lot of traders on the short side of the market.
SP500.
That is a huge jump in the SP500 which suggests plenty of institutional money behind the move.
The positive divergences seen on indicators is now playing out in stocks.
The index is now at a horizontal resistance level, so we might see some consolidation now, but further upside can then be expected.
Below is a one-year chart of SP500:
W.D. Gann the legendary early 20th Century trader often looked for major turning points one-year after a major low. The low on 2/5/22 at 4062.5 is just a few points away from the low on 12/5/21 at 4056.9. Extra-ordinary. Co-incidence? Maybe, maybe not.
Above is a 5-year chart of SP500 with a Fibonacci Fan drawn from the low in Mar. 2020 to the top in Jan. 2022. The current pull-back has stopped almost exactly at the 38.2% retracement level.
Another coincidence?
These types of coincidences(?) are often looked for by big traders.
Just suggestions that the current pull-back is over.
The intrepid can now go long - despite the old saying, "Sell in May - go Away."
Commodities.
Iron Ore -0.5%.
Overnight Oz Futures up +0.5%. That seems a somewhat muted response compared to the American rises, but we might do better than that today.
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