Buy Death, Sell The Cure? – Stock Market Trading Setup

S&P futures are surging again. Cornohaha VIrus is cured! Sell the news?

Here’s some 5:30 AM NY time perspective again. First the Shag High Composite, this time on a daily basis. The gap fill is under way.

Liquidity moves markets!

(Click on image to enlarge)

The breakdown last week looked impressive, but it accomplished nothing. It merely slot raced across and often crossed, slightly descending trading range to the bottom of the channel.

Then BOOM. Having reached trend support it rallied, helped along by the People’s Bank of China (“People’s” hahaha) injection of a gazillionillion yuan into their trading system. Most of that money promptly left Shag High for the friendly confines of Wall Street, where fucutures erupted in an orgasm of buying.

But some of the PBOC’s money stayed home, and triggered a spirited rally off support that was still rolling today but seemed to lose some steam.

So now we have a start on a gap fill. The mild downtrend channel is intact. If I had to guess, I’d say that the Shag High is probably headed for 2850-2900. But will this V bottom be the end of it? Not likely. A good short term low probably needs a pullback to test the low, with medium term momentum starting a positive divergence.

Multiple tests would be another possibility. What about a breakdown after this rocket launch fizzles? Not likely. The indicators say that the market got oversold enough on the plunge.

The important thing from the perspective of those trading the US, if China doesn’t break, then Wall Street can keep partying on.

Meanwhile, back on Wall Street, now that Cornohaha Virus has been cured, the S&P fucutures (ES) had exploded higher as of 5:30 AM in Noo Yawk. Below is a daily bar chart.

If this thing clears the January highs, it’s gonna look like the TSLA Chart- vertical. The conventional measured move target would be around 3460. They’d have to get through trend resistance at 3375. With the Fed pumping a hundred billion into Primary Dealer trading accounts this month and every month, I don’t see why the hell not.

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