Bulls Grab Control of S&P 500 Ahead of Powell, CPI

A few individual stock trades stand out now.

Technical Edge — 

• NYSE Breadth: 83% Upside Volume

• Advance/Decline: 87% Advance 

• VIX: ~$21.75

For the bulls, the S&P futures look “better” than the SPX or SPY. I like to use both instruments in tandem with each other. In that sense, the SPX/SPY still looks a tad cautious to me. 

Let’s go over why and then touch on some individual setups. While the tape broke in favor of the bulls on Friday, I’m still a bit cautious as things can unravel quickly. Keep that in mind in regards to position size, position count and ideal setups. 

S&P 500 — ES

You all know how key the 3920 pivot area has been for the ES. We poked through this level on Friday, but closed below it. The Globex rally has the ES slightly above this level now. 

Continue to play the ES just as we always do: By going level to level. 

Over 3920 keeps last week’s high in play at 3928.75. Above that puts the Globex high in play, followed by the levels we laid out last week, starting with 3985 to 4000. There we find the 50% retracement and 200-day moving average. 

Below 3916-20 puts 3900 in play, then 3975 to 3980. 

SPY

See what I mean by the ES looking better than the SPX? 

The ES is technically over its pivot, while the SPY is still struggling with $390. If the SPY can power through $390 — where it also finds last week’s high and the 50-day moving average — then it opens the door to $396.75 to $398.50. 

There it finds the 61.8% retracement and declining 200-day moving average. 

On the downside, the bulls don’t want to give up much ground below $386. 

COP