First of all, the events and the news.
MONDAY 5/28: none
TUESDAY 5/29: 0745 retail chain index, 1000 consumer confidence
WEDNESDAY 5/30: 1030 energy dept oil stocks, 1400 FOMC minutes
THURSDAY 5/31: 0830 jobless claims, GDP, 945 Chicago PMI, 1000 construction spending, help wanted index, 1630 Money supply(M2)
FRIDAY 6/01: 0830 Non-Farm payrolls, jobless rates, hourly earnings, average work week, 1000 personal income, consumer spending, ISM index, consumer sentiment
Dow Jones Industrial Average 13,507.28 -49.25
Reached the short term XOP and a spinning top doji is formed. Just nice that the last week candle was the eighth on the uptrend. The std6 studies are not showing any divergence on the MACD, volumes and stochastics. RSI remains on the upper 70 point mark. The worst thing that could happen is the index will go sideways. That is, if none of the economic data screws up, which is very unlikely.
Direction for week 5/28 - 6/01: UP
NASDAQ Composite Index 2,557.19 -3.74
NASDAQ has also been hovering around the resistance level of its 5-week-consolidation period. It looks like it really wants to break out. A tall rickshaw man has formed, with the upper shadow reaching the support lines of a 10 week uptrend. Looks like the tech bears and bulls had a strong fight and the bears couldn't bring the index down to the support levels. Any slight, good, news would send the index back to an uptrend.
Direction for week 5/28 - 6/01: UP
S&P 500 Index 1515.73 -7.02
Last week was the eighth candle in the uptrend. Now S&P is in a very strong support area with 2 lines of support: the 100% fibonacci retracement level and the uptrending support that was formed in January to February before the 27th came and screw it all up. With a very diversified portfolio of 500 stocks from all sectors, the only thing that could bring it down is the FOMC minutes on wednesday. Anyway, worst thing that could happen is it would go sideways.
Direction for week 5/28 - 6/01: UP
CBOE Volatility Index 13.34
The VIX has been consolidating since the spike on 27th February. Now we are looking at a rickshawman at the end of a consolidation - a sign of a break out. Up or down? Again it depends on the Fed and economic data ahead. On the studies, the 50-day-moving average has crossed under the 10 and 20 day moving average. It looks like it's going to turn volatile again.
CBOE NASDAQ Volatility Index 17.07
NASDAQ's volatility is also going through a consolidation, but at the level of it's previous uptrending months in January and February. A big bullish spinning top could mean that it's going to break up the resistance level at 18 points or maybe it might just test the level once again. Volatility will sure go up bearing the events ahead.
With both volatility indexes going up, it looks like a flat-to-the-upside-week ahead for the major indices. There will be a big fight between the bears and the bulls this coming week. Who shall prevail? Of course the biggest deciding factor would be the FOMC and economic data. Bearing these in mind, I wouldn't enter any trades this week until I see a rally on Friday after the data.
Direction for week 5/28 - 6/01: FLAT
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