Today's Action Sets Tone for the Rest of the Week

Here are the key levels to know now.

Technical Edge — 

• NYSE Breadth: 80% Upside Volume (!)

• NASDAQ Breadth: 71% Upside Volume 

• VIX: ~$31

I find it somewhat telling that the VIX fell just 2.9% yesterday and still closed above $30 despite what appeared to be a strong rally in the market. 

At one point, we were clocking 94% upside volume. We ended at just 80% upside volume. In a bull market, an 80% upside day would be “high-five city.” Instead, it just looks like a bear-market rally at the moment. 

Game Plan — S&P 500 (ES & SPY), Nasdaq (NQ & QQQ), Oil, SLB

Today’s action could really set the tone for the rest of the week, depending on how Powell impacts the market and how it handles this morning’s gap down. 

S&P 500 — ES 

Yesterday, we said that “If the market clears this battleground spot, it puts 3750 in play — the Globex high. Above 3750 and 3800 to 3830 is in play, along with the 10-day moving average.”

We didn’t quite make it to 3800+ but it was a pretty solid push from the bulls. We come into 8:00 down about 50 handles. 

I’m going to make it simple: Above the Globex high (3768) without reversing back down opens the door to yesterday’s high (3784). Above that puts the 10-day moving average on the table (~3610). 

Below the Globex low (3693) and yesterday’s low is in play (3661). 

With Powell’s testimony starting at 9:30 a.m., my gut leans to the lows being run and we’ll see how the ES trades from there. 

S&P 500 — SPY