Can Buyers Step in After Four Down Days?

S&P sits at vital support.

Technical Edge — 

• NYSE Breadth: 53% Upside Volume 

• Advance/Decline: 54% Advance 

• VIX: ~$22

After a solid correction in the market, are we about to see a rebound back to the upside or will the sellers step in and knee-cap the rallies? 

There’s no doubt that the bears are growing more confident. Particularly with the rise in the 10-year yield and the strong US dollar. 

Keep both of those measures — (tickers are TNX for the 10-year yield and DXY and/or UUP for the dollar, respectively) — on your screen or watchlist, as they have become quite key lately. 

For individual stock traders, please see the note down in the Stock section. 

S&P 500 — ES 

After a choppy start to the session, the ES did ultimately take out the Globex low before reclaiming Tuesday’s low and running 20+ points before a late-day spill. 

Ultimately, the ES gave us a doji candle on Wednesday, with the potential for a daily-doji-up rotation over 4025. If we clear 4025, I could see a scenario where last week’s low is back in play and possibly a test of the 10-day ema. 

On the downside, a break of 3998.50 does open the door down to yesterday’s low of ~3984. If that plays out, I think we need to keep 3950 on our radar. 

SPY