Support & Resistance Are Clear for S&P, Nasdaq

Bears have control for now, we have to remember that.

Technical Edge — 

• NYSE Breadth: 42% Upside Volume 

• NASDAQ Breadth: 33% Upside Volume 

• VIX: ~$25.50

  • Again, interesting that the VIX didn’t spike on Friday. 

Game Plan: S&P, Nasdaq, Individual Stocks 

We had a hugely successful trade on Thursday, so we went into Friday in a good position,  noting that an up-move “may eventually just be a rally to sell.” 

That said, I didn’t expect the rally to fail quite that badly on Friday. The markets held a very key area on Thursday (which was our buying opportunity) and rebounded nicely into the jobs report at 8:30 a.m. on Friday. 

The report was considered “Goldilocks” print by many, threading the needle to please the Fed’s rate-hiking spree. That rhetoric lasted all of a few hours before the S&P reversed sharply and dove back down to the lows. 

Now it’s the bulls who again quickly find themselves backed into a corner. There’s a clear risk level to hold and clear resistance to clear. Let’s look at where. 

S&P 500 — ES

Remember early last week when we were looking for support from three key measures? They were the 50% retracement, the 50-day moving average and the VWAP anchored back to the 2022 low. 

Look at Wednesday’s action, where it was rejected. Then look at Friday’s action after the jobs rally — also rejected. 

Support is turning to resistance, the rallies are being sold and bulls find themselves looking for “juuuuust a little bit more upside” that doesn’t seem to get there. That’s bear-market action.

As for key levels, bulls need to clear 3975 on the upside, then 4000. That opens the really key level of 4020, which rejected the ES on Friday and at least for today, it’s where we find the 50-day and 10-day moving averages. 

On the downside, isn’t it pretty clear? 3900 is key support. If it fails and the ES can’t regain it, the 3830s could be in play next, then the 3780s.

SPY