March 7th, 2024

Bulls are regaining momentum. As I have been mentioning recently, the market is experiencing a time correction. This is a consolidation at the highs which does not undermine the overall technical picture, but can offer short term victories to both bulls and bears intra-day due to the two-way tape. Remember, I am predominantly leaning towards bullishness, not bearishness, as the primary trend is upward. The bulls are poised to regain their momentum and drive us to another all-time high. However, comments from Federal Reserve Chair Powell on the second day of his Semiannual Monetary Policy Report to Congress before the U.S. House Financial Services Committee at 10 am ET today could either speed this up or derail it.

Key levels to watch today:

For NQ, 18,025-17,990 is the critical area for the bulls to maintain to keep me bullish today. If that holds, then 18,100-125 is the pivot up to 18,200-210. Above 18,210, the bulls regain momentum and we could reach 18,450, taking us to another all-time high. If we fail to maintain 17,990 today, I suspect we will regress to 17,825…below that, I foresee a swift downfall to 17,750.

For ES, 5095-5105 is a crucial area for bulls to above this morning to maintain my bullish stance for today. This puts 5143-5150 into play. If that gets surpassed, I anticipate a potential quick rise up to 5200. Failure to sustain 5095 today may give the bears some hope and we could see a test of 5070-5066. Below that, we are heading to 5040.

Similar thoughts for RTY, as it continues to display strength. If 2050 remains steady, I project a test of 2150 in the upcoming weeks. Given the move lower in rates, the environment is conducive for the RTY to build momentum.

Final thoughts focus on the 10 YR Yields returning to 4%. Fed Powell is trying his best to appear dovish without being overly so. Markets appreciate his approach to casting rates in a more favorable light, and with yields in 10’s decreasing, this suggests to me that placing some RTY longs in your long-term account for the upcoming months would be wise.

Stay smart, stay small.

Cheers, DELI

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