Key Algorithm Calculated S&P 500 Support Levels: 4360 (SMALL) / 4320 (SMALL) / 4300 (SMALL) / 4250 (MEDIUM) / 4240 (MEDIUM) / 4220 (LARGE) / 4200 (MEDIUM)
Key Algorithm Calculated S&P 500 Resistance Levels: 4380 (MEDIUM) / 4360 (SMALL)
Assessment: We are back over the trendline, but it was not exactly a convincing move. We had an aggressive decline and then two days pushing it back up again. Now we have to see today if the bulls run out of momentum or if the trendline holds and we go higher.
The earnings out yesterday, good and bad, both seemed to lead to selling. Not a good sign. It typically means good earnings are baked into the cake, so there is no real upside catalyst potential in earnings. It could be why we have yet to see any unusual options activity around earnings like we normally do in the FMA each quarter.
The market internals have greatly improved, and the regaining of the trendline puts the ball in the bull’s corner. However, volume on Monday was just below the COMBINED volume between Tuesday and Wednesday. So, the lack of volume shows a lack of conviction on the move. It’s not bad volume, but it is hardly bulls pushing their way back into the market. The SPY is at resistance, let’s see what she does with it today and make some decisions. I am holding my SDS position…for now. Good luck in your trades!