S&P 500 Futures – Bullish Kumo Breakout vs Bearish Kumo Twist

30 Minutes Chart


After reaching 1,500 level, S&P 500 collapsed back to the Kumo, and threatened to push lower with prices breaking below the Kumo shortly after. However during late Asian Trade, prices rallied possibly due to European traders entering early and placing positions before the 3yr LTRO repayment announcement later today at 11.00 GMT. Current Kumo (yellow) is bearish, yet the kumo itself is rising, hence lowering its bearish credentials. Stochastic readings is also higher than the previous swing high, yet price is significantly lower than 1,500, forming a divergence which is bearish in nature. Hence after piecing all information together, one would be hard pressed to formulate a clean definitive conclusion on the current sentiment.

This conclusion may not be wrong though, as it simply underlines the indecision of the market regarding the LTRO announcement later, which is going to have a significant impact on the banks survivability.

Weekly Chart


Weekly Chart is finally showing some bullish breakthrough, with the recent advance to 1,500 finally giving us a visible higher high from Sep 2012. Does this mean that long-term bullish trend is on its way? Stochastic suggest that we could yet see another pullback towards the upward trendline once more before another significant advancement. With the rising trendline clearing the 1,400 mark,  current rally looks poised to maintain its higher highs higher lows run even if we experience the pullback, anchoring the overall bullish sentiment for now.

US10Y T-Note Daily Chart


Benchmark yields are trading higher, with 10year T-Note prices trading below 132.50. Stochastic is showing a crossover just as we break the significant support, giving us more confidence that yields may go higher – and higher bullish sentiments in stocks.


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