Trading the Post-Fed Explosion

Can the bulls at least hold short-term support?

Technical Edge — 

• NYSE Breadth: 87.7% Upside Volume (!)

  • Back-to-Back weeks of 80%+ downside volume 

• NASDAQ Breadth: 82.2% Upside Volume (!)

• VIX: ~$26

The VIX is calming down and the market reacted well knowing the “worst of the worst” is not coming from the Fed. There are still some long-term and intermediate-term questions and concerns, but for now, the markets reacted well to the Fed. 

The move sent the S&P and Nasdaq exploding higher. 

The former climbed all the way up to our upside targets near 4300, while the latter tacked on 350+ points after going daily-up and rallying to our range in the 13,500 to 13,700 area. 

The question now is, will this be our low to work with and how long will it last?

Game Plan — S&P, Nasdaq, Individual Stocks

Selfishly, I’d love to see another 80% upside day. Realistically, I know how difficult that will be to achieve. If the market could do it though, the bulls would gain some meaningful momentum.

Personally, I like that the market is coming into the session under a little bit of pressure. It’s easy to navigate than a big gap-up that loses all of its steam in the opening 30 minutes. 

S&P 500

“Keep in mind, we could fly all the way up to 4300 and that only gets us back to last week’s high.”

We hit this area yesterday and it was clearly resistance. Last week’s high was 4303.50 and so far, this week’s high is 4303. However, the ES closed above the 10-day for the first time since April 20th. Bulls want to see that observation remain true.