New Year, New Trend? Not Exactly

or at least, not yet.

Technical Edge — 

• NYSE Breadth: 42% Upside Volume

• Advance/Decline: 43% Advance 

• VIX: ~$23

The S&P 500 is trying to start the new year off on the right foot. And while an opening rally is underway, keep in mind that four straight down weeks has knocked the index below most of its key daily and weekly moving averages. 

Let’s see how today settles. New year, new mindset. Let’s not begin the year with unforced errors and taking on low-risk setups. 

SPY 

On Thursday, the SPY tagged its declining 10-day moving average for the first time in 10 days. After a gap-down on Friday, it recovered nicely and is now trying to gap higher on Monday. 

That gap-up has the SPY trading near the 10-day and Thursday’s high of $384.35. Keep this level in mind as your pivot today.

Above $384.35 can be looked at as bullish, opening the door toward ~$387. Above $387 and the $390 zone (with the 21-day and 50-day moving averages) looms large. 

If the SPY can’t hold up above $384.35, it may be worthwhile to remain cautious. 

S&P 500 — ES