How the Bulls Can Remain in Control

Plus a look at TSLA and the US Dollar.

Technical Edge — 

• NYSE Breadth: 38% Upside Volume

• Advance/Decline: 46% Advance 

• VIX: ~$22.50

We’re getting a little dollar pressure this morning, which is A. good for anyone who sold the UUP or DXY yesterday and B. good for equities if that trend can extend a bit further to the downside. 

We do have a nice little bull flag in the S&P to work with, but without upside rotation, it’s meaningless. 

Last Thursday gave us a nice trade on the long side, but “the fuse has gone out” a few times since. Let’s look at the charts. Remember, lots of Fed Head speakers today and then FOMC tomorrow.

The “open trades” section continues to grow a little longer, but we have many positions with B/E stops or better — a sign that the tape is acting healthier. 

S&P 500 — ES 

Yesterday’s dip-buy below Friday’s low yielded a setup with 5 points of risk and gave bulls a nice little cash-flow trade to start a short week. 

But notice the tightening ranges of the last few days. When we zoom out a bit, you can see that little bull flag right down to active support via the 10-day ema, while 3920 to 3940 continues to hold as support. 

On the upside, let’s see if we can clear yesterday’s high of 3982. Above that put 3990 to 3994 resistance in play, then 4010+

On the downside, 3937.50 and the 10-day are key. If we revisit this area, maybe we can get another cash-flow reversal to work with. 

SPY — Daily