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Assessment: Wasn’t sure what to expect today. Friday’s in the summer, for years, have been notoriously quiet. However, the past 1-2 years, I have been noticing that Fridays year round have become pretty quiet. Seems traders like the idea of a three day weekend. Anyway, after the selling this week I thought maybe Friday would be a quiet one as everyone takes a breath and a break and looks to return on Monday.
So far, the above doesn’t seem to be the case. Early volume has been good, but we will see if that volume continues all day OR if it dies around lunch time. Regardless, the next major and key resistances to watch will be the 5% level in the 10 year Treasury yield and SPY $420 which was a level of strong support on the last round of serious selling back earlier this month. Four trading days in a row the bears tried to break SPY $420 with no luck. Is this the time they do it?
We have the 200 SMA in SPY at $422.31 today, so that will likely provide strong support especially if volume dies off later today. The question will then be does this support create a bounce or do we crash lower? So far the 10 year Treasury yield has pulled back below 5% and moving toward 4.9%, however that 5% level was going to be serious resistance given the significance. So, it will likely not break and hold on the first run at it.
Good luck in your trades!