In my opinion, the most important chart we can look at today is the June S&P 500 E-Mini. On April 3, it gapped lower. On Tuesday night, April 22 at 6:30 p.m., it gapped up 105 points. So it looks like we are on our way filling the gap from April 3. The bottom of that gap is 5564.75. The top of that gap is 5566.25. 

Markets are often very good at coming back and filling gaps. Gap theory is an idea not a science. Other markets, such as live cattle futures and crude oil, also gapped lower on April 3. Cattle futures have since rallied back and filled that gap. Crude oil has yet to fill the gap. 

Investors are steadying themselves for more losses due to concerns about trade restrictions and the possibility that Federal Reserve Chairman Jerome Powell will be replaced. No relief can be found in the typical safe places of government bonds and the U.S. Dollar.

Tonight Tesla fell short on their estimates for first-quarter revenue and earnings, which could affect the market tomorrow. I was taught that the stock market is driven by earnings and interest rates.

In the chart below, the black horizontal line is a 200 period moving average. This is a good indicator for stock prices and could be a  roadmap for the future. We are not stockbrokers at Walsh Trading Inc. We trade futures and options on futures.

I have worked in the futures industry for decades. If you want to discuss strategies, please contact me.

Stephen Davis
Senior Market Strategist 
Walsh Trading

Direct 312 878 2391 
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