Bulls Answer By Holding Key Support. Now What?

FOMC is today at 2pm

Technical Edge — 

• NYSE Breadth: 71% Upside Volume

• Advance/Decline: 75% Advance 

• VIX: ~$21.50

The market gave us a modest dip to work with yesterday, as the NQ, SPY and QQQ gave us a “look below and fail” on the breakdown. Unfortunately, I did not buy the bullish reversal even though it was something we were looking for in the game plan. Even when you draft it up, sometimes you still miss your pitches. 

Thankfully though, the markets gave us the daily-up rotation over Monday’s high. For the ES, that “put 3990 to 3994 resistance in play, then 4010+” and for the SPY it meant that “$397.66 is back in play, then $400 and last week’s high of $402.31.”

Those levels played out nicely, with the ES hitting 4012.50 and the SPY trading $400.07 yesterday. 

As discussed yesterday, the markets had a strong rip and then a nice little bull flag down to active support — the line in the sand. It’s possible we fail and still go lower, but for now, bulls held active support and they remain in control. Let’s see if they can squeeze out more upside. 

Keeping today simple as it’s pre-holiday and we have a full load of Open Positions that continue to do quite well, as we have trimmed at least once in 5 out of the current 6.  Further, it’s FOMC day (at 2pm) along with a busy slate of econ reports (see below).

S&P 500 — ES 

Above is a daily look at the ES. Now struggling with yesterday’s high and the 61.8% retrace, let’s see if it can hold up above 4000. 

If so, and if it can remain above 4012.50, then that 4050 high from last week looks like it could act as a magnet — especially when paired with the declining 200-day moving average. 

Those long from yesterday should consider a trim into the 4010 area as outlined yesterday, but they can raise their stops and fish for more upside. 

A zoomed in look is below: