S&P 500 (SPX) saw a massive reversal on Friday following an attempt at establishing new all-time trading highs. Despite the breadth and extent of the sell-off, the bears managed to rally SPX back close to break even on the day.
SPX is down 3 straight days, but still has yet to manage to even pullback 1% in total during that time.
Third straight day of trading for SPX below the 20-day moving average, with the 5-day now crossing below the 20-day MA for the first time since July 5th.
SPX could create a lower-low if the bulls can drive price below the August 2nd lows at 2147.
There was a 77% increase in the SPDRs S&P 500 (SPY) volume on Friday from the day before and the highest volume reading since July 8th.
Sharp reversal on Friday, increases the possibility of a rate hike this year, and the possibility of even two more (though I find the latter very, very unlikely). Odds for a September rate hike increased as well, though that scenario also seems very unlikely.
Three support levels to watch going forward on SPX is 2168, 2155, and 2147. The breaks are only valid if the price can close below those support levels.
The dip buyers are still alive in the last hour of trading and even more so when the market is showing notable weakness going into the close.
CBOE Market Volatility Index (VIX) showing signs of finally emerging out of its base of the past month. Despite sell-off at the highs, the rally into the close managed to keep the VIX from only rising 0.15% on the day.
30 minute price action of SPX maintains a nice double top pattern over the past two weeks of trading as well as a nice series of lower-highs and lower-lows over the past week.
Oil still struggling to find buyers over the past week, is at risk again to test the August lows again in the coming weeks.
Dow Jones Industrial Average (DJIA) has a double top that confirms on a move below 18247.
At this point, and with the election ahead, I’d expect the market to keep rallying higher. I don’t expect there to be a rate hike between now and the election. To do so would impact the market and thereby the election. I don’t think the Fed wants that, particularly since Trump has indicated that he would replace Yellen.
ssive reversal on Friday following an attempt at establishing new all-time trading highs. Despite the breadth and extent of the sell-off, the bears managed to rally SPX back close to break even on the day.
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