Markets Struggle With Resistance After a Big Rally

Here's how I'm looking at the indices now

Technical Edge — 

• NYSE Breadth: 51% Upside Volume

• Advance/Decline: 61% Advance 

• VIX: ~$19

For what it’s worth, I still like Ulta’s setup from Friday. And keep an eye on CAT. We also got an entry opportunity in TJX. Overall, I’d say the environment for individual stock trades continues to get healthier, which is a good sign overall for equities.

At the moment, stocks are trying to rally on the PPI and retail sales results, but as the S&P and Nasdaq both sit near resistance — and with the Nasdaq up seven days in a row already — a “reset trade” maybe in order.

I’ve cleaned up the Relative Strength list this morning and want to go over a few setups below.

S&P 500 — ES

The ES remains trapped below last week’s high and its long-term downtrend resistance mark. The range continues to tighten as it consolidates below this area. 

3996 has been support. A break below that could put 3965 to 3970 in play. That was support last week and around where the 10-day comes into play. 

Above is the 30-minute chart of the ES. For now, I’d keep the 3995-ish area on watch as potential support, along with the 200-sma. 

SPY