Posted tonight are the daily S&P e-Mini futures, and the weekly and monthly S&P cash index along with the NYSE volume. The cash index is shown because it captures longer term resistance accurately; the e-Mini futures does not show longer term levels accurately because of price adjustments made due to front month contract changes.
On Wednesday, we saw some supply come into the market (red arrows on daily chart). Thursday and Friday spent their time trading within the range of Wednesday. That makes three days in which the market held a fairly tight range. Although it is not a given, watch for volatility to pick up on Monday.
At Longer-Term Resistance
The S&P cash index on the weekly and monthly highlight that the stock market is butting up against resistance. The weekly chart shows this clearest as price was unable to hold above the 1370.58 cash index high. Last week closed essentially level with the prior week. This suggests additional trading around the resistance level and the potential for a pullback.
For the Beginning of the Week
Although we are at resistance, I do not view the current situation as overly negative as we still have not seen significant supply come into the market. Nevertheless, the last time we saw a bit of supply enter the market (February 15) – marked A on the daily chart – the market immediately turned around and rallied over the next two days. In this latest instance, the market has not rallied up, but instead traded within the range of the supply day. Given the longer-term resistance level and the recent daily action, we could see a minor pullback, perhaps down into the 1360 – 1350 level.
Friday did not produce much volume, however. Although the market action indicates the downside has greater odds, holding Friday’s low, or a dip underneath and rally back up above Friday’s low could spark a further rally above recent highs.
Leave a Reply