Writing this from my new computer which I am very excited that it is finally fully setup and running like a champ! Cant wait to test it intraday tomorrow as my macbook air was struggling for sure with everything I had running at one time.
Intraday today despite a morning start that looked initially to be bullish the bears were able to get control of the day. Of course, this was at the assistance of fed member Brainard who dropped the bomb about balance sheet reductions and the expedited timeline for the fed. This set the market in to quite the tizzy seeing a massive 0.5% sell off within 30 minutes of news dropping. Initially it looked like we may recover after a clear market over-reaction… thinking back to the Saudi oil field attack we had last week. However, after a small pop from the low of 453.8 to 455.5, the bears took back control and took SPY for an impressively bearish close below some key supports for a -1.25% close.
The one thing I will be considering going into tomorrow if the markets took the opportunity to price in the FOMC minutes tomorrow and that the markets are assuming that JPOW had said and will be more hawkish than anticipated. However, it would not be surprising to see the markets react bullishly tomorrow morning before seeing a massive sell off once minutes drop. Historically thinking back that is how the last few FOMC meetings have gone.
SPY today closed below a key “ level” of support of 452 today. The next support level is down near 448. It was quite the fight at 452.5 all day but I believe now that we broke below this support we may start seeing some more downside.
The daily chart for spy is quite bearish now. Looking back to March 29th we formed what I am calling the upper resistance at 462 and now we just may retest support down near 410 over the next month. Also today was the first candle closed BELOW the daily 8ema since March 15th. The bears tried very hard last week to close below but the bulls wouldn’t let it happen. In general a close below the daily 8ema is a bearish omen in the markets. We also broke the grey upward channel today officially.
The weekly chart is currently set up with another doji but any downward momentum from her will make it a true bear candle. The weekly 20ema and 8ema is still down near 445-446 which could be the target for the bears this week (that is also major supports on the daily chart).
Apple despite a bearish day tested the support of its channel and it is too close to tell yet on the daily chart if its broke it officially. It did manage to close above its daily 8ema at 174.83 which is a more bullish close for Apple after a -1.89% day.
But as you can see on both SPY and Apples daily chart their daily MACDs are ready to curl to sell signal and the RSI is looking bearish both near 58 and trailing downward now.
The VIX had yet another wild day. Opening at 18.55 before climbing all the way to 21.57 before market close. That is another massive day, at 16% run up from low to high is wild for VIX! Again the VIX though was the guide of the market. Despite the expect over-reaction and mid day bullish reversal once the vix continued its slow climb up we knew that was not going to happen.
Historically 16.5 to 21.5 over the last year or so has been the average VIX Range so we are not at the upper level of that. A VIX back over 22 would be quite bearish also and could allow for some increased volatility that we surely have been lacking.
I will be gone in the morning with some personal stuff so I am going to include all premarket levels to watch here as I will not have time to post in the morning. I will be back on the server for live chat hopefully by 12 at the latest.
Support-
450.9 -> 450.45 à 449.7 à 449.1 à 448.4 à 447.21 (break support of next “level”)
-0.5%= 448.7
-1%= 446.5
-1.5%= 444.3
-2%= 442
I would watch for a break of 450 cleanly followed by the break to 447.2. If we can break and hold there a close near the daily 20,50 and 100 ema all near 444-446 is 100% possible.
Resistance-
451.5 à 452.2 (break back above next “level” up) à 452.7(major support intraday today) à 453.4 à 454
0.5%= 453.3
1%= 455.5
1.5%= 457.8
2%= 460
Bulls will need a clean gap above 452 resistance that holds, good FOMC news and they could very well see 455 to 457 end of day with a run up near 460-465 to end the week.
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