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Not only do we close out the last week of August, but we close out the month of August today as well.
Before I get into sharing how the weekly and monthly bars are shaping up, I need to mention that all major markets will be closed Monday for the Labor Day Holiday here in the States.
And with a long weekend coming, I do expect slow trading today, even though today is a full session.
Yesterday, saw a bearish reversal in the S & P 500. There were two factors we were looking for to determine id the market should reverse.
The first was the minor 2,902.83 level. As I said yesterday, was was the level to watch because if the S & P 500 closed above it, then the upside objective would be to 2,939.50.
A close under it would mean the market would still need two closes above 2,902.83 to move higher.
The other significance of 2,902.83 is that when the market clears a major level, which it did by clearing 2,890.60, it often stalls out at the next minor level.
The other factor we were looking for was for the VIX to close above 12.50.
I mentioned that I did not feel we would see profit taking in the market until the VIX moved higher ... and that is what happened yesterday.
Yesterday, the S & P 500 closed 12.91 points lower, at 2,901.13. Even though the market sold off, the sell was quite orderly. The range for the day was 17.24 points and the daily average true range is 19.35 points.
You would expect a major sell off to at least exceed the average true range.
Resistance from yesterday's daily price bar is in the 2,903 to 2,905 area.
For the week, the S & P 500 has had a high of 2,916.50 and a low of 2,884.69. The weekly midpoint, so far is 2,900.60. And yesterday, the market closed just above it.
This is a key level to watch today. A close under the midpoint would be bearish.
In scaling back to look at the monthly price bar, we see a high of 2,916.50 and a low of 2,796.34. The monthly midpoint is 2,856.42.
Yesterday closed about 60 points above the midpoint.
As it is shaping up, we could see a bearish weekly close and a bullish monthly close.
The short term, 30 minute and 60 minute charts remain bullish. Price did sell off against the upper bands on both charts.
The upper band on the 60 chart is 2,920 and on the 30 minute is 2,928.
Pre open, the S & P 500 is trading about 6 points lower.
Continue to monitor the longer term levels for the market.
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: 14.06 *
Major level: 12.50 <
Minor level: 10.94
Minor level: 7.81
Major level: 6.25
The VIX closed at 13.53. This was the first close above the major 12.50 level.
We had been looking for a bounce, the question is when and we gor it yesterday.
Having said that, for the VIX to move up to 18.75, it will need two closes above 14.06.
14.06 should offer resistance. If that does hold, I would expect 14.84 to hold.
12.50 should now be support.
SPX:
Major level: 2,939.50
Minor level: 2,927.28
Minor level: 2,902.83 **
Major level: 2,890.60 < Hit
Minor level: 2,878.40
Minor level: 2,854.00
Major level: 2,841.80
Minor level: 2,829.60
Minor level: 2,805.20
Major level: 2,793.00
Look for support at 2,902.83. If this level is violated, I would expect the market to drop to 2,890.60.
Short term intra day 30 and 60 minute charts are still bullish. Technical support is at 2,860. Once again, we saw the market pullback from being up against the upper bands on the short term charts.
QQQ:
Major level: 187.50 Hit!
Minor level: 185.94
Minor level: 182.81 **
Major level: 181.25 <
Minor level: 179.69
Minor level: 176.56
Major level: 175.00
Minor level: 173.44
Minor level: 170.31
Major level: 168.75
The QQQ closed at 186.41. The QQQ did hit the Objective of 187.50, we were looking for.
Yesterday's high was 187.52.
184.38 should be a short term suport level. And 185.94 should also offer support. 190.63 could offer resistance.
IWM:
Major level: 175.00 <
Minor level:174.22
Minor level: 172.66
Major level: 171.88 **
Minor level: 171.10
Minor level: 169.53
Major level: 168.75
Minor level: 167.97
Minor level: 166.41
Major level: 165.63
The IWM closed at 172.36. The move higher, the IWM would need two closes above 172.66.
173.44 is minor resistance.
A break under 171.88 and I would expect 171.09 to hold as support.
TLT:
Major level: 123.44 <
Minor level: 121.49
Minor level: 120.70 **
Major level: 120.31
Minor level: 119.92
Minor level: 119.14
Major level: 118.75
Minor level: 118.36
Minor level: 117.58
Major level: 117.19
The TLT closed at 121.28. Objective is still to the 123.44 objective.
121.88 is minor resistance. And 121.09 minor support.
The TLT moved above the midband on the daily chart. That level is 120.74. A break under this level would be bearish.
GLD:
Major level: 117.19
Minor level: 116.80
Minor level: 116.02
Major level: 115.63
Minor level: 114.85 **
Minor level: 113.28
Major level: 112.50 <
Minor level: 111.72
Minor level: 110.16
Major level: 109.38
It closed at 113.64. Biased for a test of 112.50, but the GLD is oversold.
113.28 is a minor support. If this level holds, the GLD could bounce.
XLE:
Major level: 78.13
Minor level: 77.35
Minor level: 75.78 **
Major level: 75.00
Minor level: 74.22
Minor level: 72.66
Major level: 71.88
Minor level: 71.10
Minor level: 69.53
Major level: 68.75
The XLE closed at 75.02. The XLE will need two closes above 75.78 to move up to 78.13. And it continues to try and hold the 75 level.
Minor support should now be at 74.61. And minor resistance is at 75.78. The XLE will have to clear 75.78 to move higher.
The 30 minute chart has crossed into an uptrend. Short term momentum is shifting to the upside.
FXY:
Major level: 86.72
Minor level: 86.5
Minor level: 86.14 **
Major level: 85.94
Minor level: 85.75
Minor level: 85.36
Major level: 85.16
Minor level: 84.97
The FXY closed at 86.17. The FXY bounced and if it closes above 86.14 today, it should test 86.72.
85.94 should offer support.
Technical resistance is at 86.21, so it the FXY can clear this level, it should continue to bounce.
AAPL:
Major level: 225.00 **HIT
Minor level: 221.88
Minor level: 215.63
Major level: 212.50 <
Minor level: 209.38
Minor level: 203.13
Major level: 200.00
Apple closed at 225.03. Target of 225 hit yesterday. What now?
If Apple can close above 225 today, the next move should be to 237.
Support should be at 221.88.
WATCH LIST:
Bullish Stocks: AMZN, CMG, ILMN, ANET, DPZ, SPY, NVDA, UNH, BDX, PANW, ZBRA, WDAY, V, SODA, RHT, GRUB, SPLK, DECK, DG, NTAP,
Bearish Stocks: AVGO, BABA, ITW, SMG, HIG, AMAT, CPB, BECN, JD, WRK, AN
Be sure to check earnings release dates.