Powell's Presser Fires Up the Algos. Now S&P Is Pushing New 2023 Highs

So far for the month, the S&P 500 index (SPX) is up 116 points or 2.6% and the Nasdaq is up 336 or 2.45%. The Dow is up 1,112 points or 3.23%, while the Russell 2000 is up 4.85%. 

While the S&P and Nasdaq haven’t exactly been a disappointment, it’s clear there’s been a rotation into the laggards — AKA, the Dow and the Russell. 

Technical Edge 

• NYSE Breadth: 66% Upside Volume

• Advance/Decline: 65% Advance

• VIX: ~$13

Yesterday’s a great example of, either trade the environment you’re in or wait until the environment suits you. 

We went into yesterday knowing very well that they could and likely would run the edges of the range and that’s exactly what the machines did. For all the volatility — a 30 point rip, then a 35 point plunge — the SPX ended the day unchanged, down 0.71% or 0.02%. 

So either think and trade like an algo on those days or don’t trade those days and wait for setups that better suit your trading style. It’s as simple as that. 

SPY

The S&P has been churning below resistance all week, but we’re finally getting a big upside pop this morning. 

I will include an SPX chart as well, as the SPX is set to gap into that big ~4600 level. I want to see if they “sell the open” as a retest of prior resistance would be an attractive entry. 

On the upside, let’s see if the SPY can push that upside extension level near $459.50 to $460. On a dip, we really want to see prior resistance between $456.50 and $457 hold as support. 

• Upside Levels: $459.50 to $460, $461.50

• Downside Levels: $456.50 to $457

SPX

If we open at or near 4600, active traders are likely thinking “fade,” even if it’s just for a few points. If it really comes in, I’d think the 4575 to 4582 area would be decent support for a bounce. 

• Upside Levels: 4595-4600, 4610, 4629

• Downside Levels: 4575-82, 4567

S&P 500 — ES Futures

• Upside Levels: 4633, 4641, 4648-50

• Downside levels: 4620, 4605-10

QQQ