Stock's Modest Bounce Didn't Undo the Damage

We're still in a cautious, bearish tape.

Technical Edge — 

• NYSE Breadth: 52% Upside Volume 

• NASDAQ Breadth: 63% Upside Volume 

• VIX: ~$26.25

Game Plan: Bonds, Dollar S&P, Nasdaq

I want to remind everyone that, generally speaking, I am not a bearish person. I do not like to overthink the macro backdrop and while I’m aware of the negatives, I’m also aware of reality. Which is that since 1950, the S&P 500 has risen more than 80% of the time on an annual basis. 

That said, being bearish for most of this year has simply been following the price action and the trend. On Wednesday, we saw the worst trading day since June 2020 as the S&P 500 fell 4.3%. 

Yesterday’s mild rebound of 0.35% did not do much to reassure the bulls. If we rotate above Thursday’s high, it could indeed trigger more buy-stops and push the indices higher. My “gut” feeling says to be on the lookout for a rotation lower, though. 

S&P 500 — ES

I’m doing things a little differently this morning and just looking at the 15-minute chart for S&P futures of the last two days. 

The levels are clear-cut: 3975 to 3980 has been resistance, while support has been around 3935. 

If we clear resistance, 3995 to 4000 is in play, which was post-CPI support for several hours on Wednesday. If we break support, yesterday’s low of 3929 is in play, followed by 3900, then 3883 to 3886 (the last weeks’ worth of lows). 

SPY