Markets Look to Set Tone Early in a Shortened Week

Let's see how the market handles this morning's dip & Dollar strength

I want to talk about one thing very quickly, which is picking your spots. Last week we were buyers on Thursday morning and on Friday, we were taking profits. Even if that was your only one to two trades all week, then you did very, very well. Traders don’t need to take 20 trades a day to be successful. In fact, it is often a “less is more” approach that works better for most traders. 

Keep that in mind this week. 

That’s particularly true with just three full trading days this week. The market is closed on Thursday, is open for a half-day on Friday and we have an FOMC release on Wednesday.

This morning the dollar comes in hot, but as you’ll see below, it’s trading into a key level. On the flip side, stocks come in under pressure and we’ll have to see how active support holds (or doesn’t hold) to set the tone for the week.

Technical Edge — 

• NYSE Breadth: 54% Upside Volume

• Advance/Decline: 59% Advance 

• VIX: ~$24

S&P 500 — ES 

Friday’s low is down at 3942.50, while the rising 10-day moving average is at ~3935. 

Two tags of the 10-day in three days does cause the bulls to lose a little luster here. However, if we get a tag of the 10-day and then a reclaim of Friday’s 3942.50 low, it’s hard not to take a shot on the S&P here.