Range elevated just a touch beyond normal overnight while volume came in normal during globex. The market continued pushed lower overnight before finding buyers around Friday’s session low to bring us back flat headed into Tuesday. Advance Retail Sales came in a bit softer than expected at 8:30am and the data encouraged a bit more buying.
This is where the week starts becoming interesting. WFC and JPM earnings are out this morning and neither has made a dramatic premarket move. The financial sector has coiled over time and we may see the compression resolve as the banks earnings continue to roll in. Also important is tonight’s GDP data out of China. All eyes are on the red giant as its stock market soars. Finally, the Nasdaq is likely to be reactive to the INTC earnings scheduled for release after market close.
Yesterday the week started with a small gap up then an open drive higher. Price managed to tag the naked VPOC at 4438.25 and go slightly beyond it before stalling out. Sellers then slowly worked the market lower before accelerating down through the open drive to extend the range lower.
Intermediate term conditions are neutral, but overall context is bull.
Heading into today, my primary expectation is for sellers to make a push to test 4395. Look for responsive buying here. Choppy conditions between 4395 and 4405 give way to another leg lower to target 4382 and a stretch target of 4379 before 2-way trade resumes.
Hypo 2 is buyers push off the open to 4415 where responsive sellers are found and two-way trade ensues with buyers sustaining above 4395.
Hypo 3 is buyers make an aggressive push back above 4415 which leads to a second leg up to 4429.25.
Levels are highlighted below:
Hypo 2 but weaker than expected