Castles Made of Sand, Fall in the Sea Eventually

Fed's on Wednesday. 75 basis points on tap.

Technical Edge — 

• NYSE Breadth: 18% Upside Volume (!)

• NASDAQ Breadth: 22% Upside Volume 

• VIX: ~$27.80

Game Plan: S&P, Nasdaq

Despite Friday’s big rally off the low, the S&P and Nasdaq still closed lower on the day. Worse, the weekly candle was quite destructive from a technical perspective. 

Even with Friday’s late-day rally, we still ended with an 82% downside day on the NYSE. 

And so castles made of sand

Fall in the sea eventually

-Hendrix

S&P 500 — ES

I can’t help but notice how Thursday’s low of 3905 was also the high from Friday. Granted, one could say it’s Friday’s Globex high (it was), but it also climbed to 3903.50 into the close — close enough, I say. 

The action remains bearish and as you can see on the 30-minute chart above, the ES is clinging to Friday’s low. 

If it can hold these levels, I think we could see a rally to the 3875 to 3880 area in the opening hour of trading. Above that does put the ~3900 area in play, but I would first look at the 3875 to 3880 area as resistance. 

A break of ~3850 and traders must watch this level as a potential pivot zone. If it breaks and acts as resistance, lower prices are in store. 

S&P — Daily Take & Larger Levels