Yesterday, the S & P 500 sold off and closed at 2,036.71.? It closed under the low of the doji bar from Tuesday and the down to up volume picked up.? In addition, it closed under the downside level, which is 2,046.88.
The implication now is if the S & P closes under 2,046.88 today, then the downside objective becomes 2,000.
It is trading just above the mid band on the daily chart, which is 2,034.39.? A break under this level and it should act as resistance.
And based on where the SPY is trading before the open, it appears that will happen.
The levels help to determine what the market should do.
For example, we have been looking at 12.50 as a major level for the VIX for quite some time now.
It came within 1.25 points of achieving that objective.? And likewise, the S & P came within 6 points of the 2,062.50 objective.
At this point, I would not expect this pullback to go farther than the 1,938 level.? At least that would be the area I would target for any pullback to stop.? If the market does drop farther than that, then it tells us something different.
There is one position that expires today.? Today being the expiration for this week's weekly options due to the fact that the markets are closed tomorrow.
That is the short $4.50 call on DUST.?? DUST exploded yesterday and was up almost 23%. However, it is still under the strike, which means it will most likely expire worthless today.? Unless DUST has another day like yesterday.? Having said that, I will send a separate email if we do need to adjust the position.
Where DUST settles today should tell us if a bottom is in place.
Here are the key levels for the markets.
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VIX:
Major level - 25.00
Minor level - 23.44
Minor level - 20.31
Major level - 18.75
Minor level - 17.19 *
Minor level - 14.06
Major level - 12.50
The VIX closed at 14.94 yesterday.? This is above the 14.06 level.? If the VIX can close above 14.06 today, look for a move up to 18.75.
15.63 is still a resistance level, so if the VIX can get above it, expect it to act as support.
S & P 500 Cash Index:?
Minor level - 2,078.12
Major level - 2,062.50
Minor level - 2,046.88 *
Minor level - 2,015.62
Major level - 2,000.00
Minor level - 1,984.38
Minor level - 1,953.12
Major level - 1,937.50
Minor level - 1,921.88
As I mentioned above, a close today under 2,046.88 and the downside objective should be to 2,000.
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2,031.30 should be a minor short term support level.
Nasd 100 (QQQ):?
Major level - 112.50
Minor level - 111.71
Minor level - 110.16
Major level - 109.38
Minor level - 108.60
Minor level - 107.03 *
Major level - 106.25 *
Minor level - 105.46
Minor level - 103.91
Major level - 103.13
The QQQ came within 1 point of the 109.38 objective.? At this point, if the QQQ closed under 108.60, it should retest 106.25.
TLT:?
Minor level - 132.03
Major level - 131.25
Minor level - 130.46
Minor level - 128.91*
Major level - 128.13 *
Minor level - 127.34
Minor level - 125.78
Major level - 125.00
The TLT closed yesterday at 129.49, above the 128.91 level.? A close today above that level and the TLT should move up to 131.25.
Lower levels should still act as support.
GLD:
Major level - 125.00
Major level - 121.88 *
Minor level - 121.10 *
Minor level - 119.53 *
Major level - 118.75
Minor level - 117.96
Minor level - 116.41
Major level - 115.63
The GLD closed yesterday at 116.61.? If the GLD closes under 117.96 today, it should drop to the 115.63 level.
Minor support at 116.41.?
XLE:
Major level - 65.63
Minor level - 64.85
Minor level - 63.28
Major level - 62.50
Minor level - 61.72 *
Minor level - 60.16
Major level - 59.38
60.94 should be a minor support level.? The XLE closed at 61.54 yesterday, so if it
closes under 61.72 today, expect a move down to 59.38.
Apple:
Major levels for Apple are 112.50, 106.25, 100, 93.75, and 87.50.
Apple is trading right around the 106.25 level.? To move up, Apple would need two closes above 107.81.? To drop, it would need two closes under 104.68.
Watch list:
Bullish Stocks: LMT, SPG, FRT, KMB, CB, HON, FB, FXE, UPS, ITW, PSX, EL
Bearish Stocks: REGN, LLY, JACK, VRX, RH, TEVA, ALR, ANAC, RMD
Be sure to check earnings release dates.
