Technical Outlook:

  • SPX closed Friday with a nice doji candle right on resistance of the declining trend-line off of the May highs. 
  • Overall the market was very mixed, with the Nasdaq soaring, Dow selling off, and SPX relatively flat. 
  • SPX is concerning me at current levels as the VIX is right at key support, and has seen reversals at this level every time so far this year. 
  • The 5-day moving average continues to be a nice moving average to monitor the health of the currently rally. 
  • A move to 2130 would nullify completely the head and shoulders pattern that has been in place going back to April. 
  • A move to this price level would create a higher-high on SPX. 
  • Volume on SPY was below average on Friday. 
  • T2108 (% of stocks above the 40-day moving average) is showing some profit taking in the market as the indicator is also right at declining resistance off of the April highs. 
  • The ultimate key for SPX is whether it can establish new all-time highs. This could lead to further, rapid price expansion. 
  • The market is no doubt overheated from the current move, but that doesn’t mean it will immediately roll over. 
  • Technically speaking, SPX is very much range bound still and in the thickest area of resistance on the chart. 
  • The market doesn’t care about the economy nor earnings. That is not what is driving it. The market cares about what the Fed is doing to keep equities propped up. 


My Trades:

Chart for SPX:

SP 500 Market Analysis 7-20-15