S&P Bounces From Key Support. Can It Continue Higher?

CPI is on tap tomorrow.

Technical Edge — 

• NYSE Breadth: 69% Upside Volume

• Advance/Decline: 65% Advance

• VIX: ~$19.50

The S&P bounced from our first big layer of support. For the ES, that was 4095-4100 and for the SPX that was 4070-75. Both bottomed in that range and plowed higher for the day. Now though, we have to be a little more cautious I think. We may get one more solid day of action out of this, but then this week gets tricky with a lot of pre-market noise.  

We have the CPI report on Wednesday morning, the PPI on Thursday morning and a number of bank earnings on Friday morning. 

S&P 500 — ES 

4142.50 — the March high — remains vital. Above is constructive for bulls. Below is less so. 

• Upside Levels: 4142.50 (March high), 4158-60, 4172-75

• Downside levels: 4095-4100 (that’s the 10-day ema and three-day low), 4076, 4060-65 

If we zoom out the “bigger picture” via the weekly chart and strip away the indicators, you can see why this battle is important in the longs vs. shorts narrative. That’s as the ES finally broke its streak of lower lows and lower highs, but is having trouble resolving in a dominant direction as it chops between 3850-3900 on the downside and 4150-4200 on the upside. 

To drive this point home, we could fade 250 handles by the end of the week and, at least technically speaking, the S&P would still be okay and range-bound. 

SPY