The S&P Is Stuck Between Two Key Zone

Here's how we're playing the range.

• NYSE Breadth: 75% Upside Volume 

• Advance/Decline: 76% Advance 

• VIX: ~$24.40

Despite the headline-driven volatility yesterday, we still had a 75% upside day and the indices still put in a green session. We also had a great trade setup from yesterday off the open.

That said, the S&P failed to hold 4000 for a third-straight session, while the Nasdaq struggled with a key junction on the charts as well. 

For now, the trend remains in favor of the bulls. However, the real key becomes, how will the markets hold up to a larger dip? In my view — and it means nothing at all compared to what the markets want to do — it would be healthy to retrace some of the recent rally from last week. Let’s get into the specifics. 

Technical Edge — S&P, Bonds & Individual Stocks

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S&P 500 — ES 

The first word that comes to mind here is: Patience. 

The close from last Thursday was 3961. The low from Friday, Monday and Tuesday were: 3951, 3964 and 3960.

On the upside, 4015-ish has been resistance. 

If the ES can clear this range, then 4050 is back in play, along with the 200-day moving average near 4075. 

On the downside, 3950 to 3960 is support until proven otherwise. It would take a 2% dip today to get there, but I’d love to see a test of 3920. Not only has that been a key pivot, but it’s also where the 10-day moving average comes into play. 

ES — The Trade

Multi-day look at the 30-min chart above. Let’s see if the ES can get above 4000, then ~4015. That’s resistance from the Globex session, as noted above. 

Support outlined on the downside. 

Patience!

SPY — Daily