Last week saw a sell off in the markets, with the S & P 500 closing 25.18 points to the downside. However, the price action for the week formed an inside bar.
An inside bar is a bar with a lower high and a higher low. Usually that type of price formation can lead to a range expansion.
The question is this ... will the upmove continue or will there be a pullback?
2,062.50 is a major resistance level.? Quite frankly, if the S & P can clear that level, I feel you could see a run up to the 2,250 level.? I know that would seem rather aggressive and would mean the market will go onto a new high, but it could be possible.
The concerning element is that the VIX is almost down to the major support level of 12.50.
It did bounce when it stopped at 13, but a retest of 12.50 may still be on the works.
The daily chart for the S & P 500, as well as the other major markets, look to be forming cup & handle formations.? This is a bullish scenario and if price can clear it's short term resistance, my statement above would look a lot more predictive.
The markets should open higher this morning.
Alcoa reports earnings after the bell today beginning earnings season.
Here are the key levels for the markets.
VIX:
Major level - 25.00
Minor level - 23.44
Minor level - 20.31
Major level - 18.75 *
Minor level - 17.19
Minor level - 15.63
Minor level - 14.06 *
Major level - 12.50 *
The VIX is trading between the major 12.50 and 18.75 levels. I mentioned watching the 14.84 level Friday morning and it happened that it was the low for the day.
Continue to monitor the 14.84 level.? If the VIX opens under that level, it should act as resistance.? 13.28 should be support.
?
S & P 500 Cash Index:?
Major level - 2,125.00
Minor level - 2,109.38
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
2,046.88 was tested on Friday. The S & P 500 opened at 2,045.54 on Friday and closed at 2,047.60.? Assuming the market opens above that level, it should act as support.
2,093.80 is the level that has to be exceeded for the S & P to move higher.? I would expect it to act as resistance the first time it is tested.
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
I mentioned that 108.60 should be support and Friday's low was 108.61. It should continue to act as support for the QQQ.?? If the QQQ can move above 109.38, that level should then be support as well.
Two closes above 110.16 and the objective should be to 112.50.
TLT:?
Major level - 134.38
Minor level - 133.59
Minor level - 132.03 *
Major level - 131.25 *
Minor level - 130.46
Minor level - 128.91
Major level - 128.13
The TLT closed at 132.01 on Friday, just 2 cents under the 132.03 level.
The major 131.25 level should also be support.? Minor resistance at 133.59.
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
Minor level - 114.85
The GLD closed just under the 118.75 level on Friday.? Two closes above 119.53 and the objective should be to 121.88.
115.63 should be major support.
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
The 62.50 objective was hit Friday, when the XLE hit a high of 62.71.? At this point, the XLE will need two closes above 63.28 to move up to 65.63.
Major support at 61.72 and 60.94.
Apple:
Major levels for Apple are 112.50, 106.25, 100, 93.75, and 87.50.
Apple sold off to the 108 support level.? If this can hold, look for a move up to 112.
Buy against support.
Watch list:
Bullish Stocks: LMT, STZ, KMB, BDX, MCD, JNJ, DPZ, VMC, EW< wYNN, ADP, THS
Bearish Stocks: CMG, AGN, BWLD, CLB, EXPE, DDS, VFC, FL, UAL, AKAM
Be sure to check earnings release dates.
