US Stock Markets are flashing warning signals now.

10 April

Emini S&P June futures I warned that we are likely to see increased volatility & this can be a sign that prices are hitting resistance as the bears start to try to gain control.
I am watching very carefully to see if a head & shoulders builds, with neck line at 5200/5190.
We have a bearish engulfing candle on the weekly chart!!
The early warning signals are clear so yesterday’s collapse was certainly not a surprise.
Emini Nasdaq formed an important bearish engulfing candle on the daily chart on Thursday before we bounced well on the very strong US non farm payroll number.
However we wiped those gains out yesterday as we form a triangle consolidation.
Emini Dow Jones June futures formed a bearish engulfing candle on the weekly chart & yesterday we formed an important bearish engulfing candle on the daily chart.


Emini S&P: formed 2 second bearish engulfing candle on the daily chart last week.

I was not convinced that Friday’s strong bounce was the start of a new leg higher in the longer term bull trend & yesterday proved me to be correct.
(We would at least have to beat 5280 then 5310 for me to feel more positive).

We held just above my buying opportunity at 5175/65 again yesterday as we carve out a sideways consolidation.
During this process it is difficult to find low risk opportunities.
I must wait for the pattern to form & then use the trend lines for guidance. It has been the right decision as far as I am concerned as we have just been stuck in a 140 point range for 3 or 4 days.

First support at 5175/65 & longs need stops below 5155. Targets: 5190, 5230 & even 5250 is possible.
HOWEVER if this level fails & we break & hold below 5175, I will take it as an important short term sell signal. First target would be 5080/70.

Nasdaq June futures: my buying opportunity at 18050/18000 remains key to direction for this week & longs need stops below 17950.

I must wait for a breakout of the short term triangle for the next opportunity.

Targets for longs: 18200/230, 18370/400 & 18500.
Just be aware that a break lower is an important short term sell signal targeting  17750/700 & even 17650/610 is possible (in fact it is likely).
I think we will see a break lower sooner rather than later, but wait for the break, do not short until the signal is triggered!!

Emini Dow Jones June. The bounce on Friday confused the outlook a little so yesterday’s collapse was no surprise.

There is still no clear chart pattern so I will wait for a day or 2 in the hope of some clarity but I am starting to favour a move to the downside.

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With almost 40 years experience, Jason Sen began trading his own account on the floor of the London International Financial Futures Exchange at the age of 19, in 1987. He spent 15 years specialising in market making interest rate and index options on floor then moved on to trading forex on screen at the turn of the millennium. He is also recognised as a skilled technical analyst developing this expertise for the last 20 years.

His extensive trading experience from the LIFFE trading floor to screen trading and deep understanding of technical analysis give him a thorough understanding of the financial markets and the factors that drive them.

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