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Friday closed the week out with a 14.72 point drop. The S & P 500 closed at 2,992.07.
And Friday was actually the first day in four weeks where the daily range exceeded the average daily true range. The ATR is now 29.71 and Friday's range was 31.69.
And we have now had 7 days where the market has traded in a tight range since the rally up off the bottom on August 5th.
The chart pattern appears to be setting up a cup and handle pattern. This is a bullish setup. And with the daily chart still bullish, the bias is to the upside. Even if the market does have a sell-off, I would expect a rally.
The resistance level from Friday's daily bar is in the 3,000 area.
The weekly price bar formed an almost perfect doji. This can indicate a pause in the market or it can indicate a potential reversal.
The key level for support or resistance from the weekly price bar is in the 2,994 to 3,000 area.
For the week, the S & P 500 closed 15.32 points lower. And like the recent daily price contractions, the weekly bar contracted as well.
The range for the week is 43.42 and the weekly average true range is 77.90.
Typically, the price will continue to move in the direction of the violation of the high or low of a doji bar.
Last week's high was 3,021.99 and the low was 2,978.57.
So watch to see if either level is violated.
We have only 6 more trading days left in the month of September. As it is shaping up, the S & P is trading back above the upper band on its monthly chart.
The upper band now reads 2,966.23. And Friday closed out at 2,992.07. This is about 26 points above the upper band.
A close above the upper band would certainly be bullish. And naturally, a close under the upper band would be bearish.
Earnings season is winding down. The next quarter will begin around October 15th.
AZO reports tomorrow before the close. And NKE reports tomorrow after the close.
Pre open, the S & P is trading relatively flat.
Here are the Key Levels for the Markets:
$VIX:
Major level: 25.00
Minor level: 24.22
Minor level: 22.66
Major level: 21.88
Minor level: 21.10
Minor level: 19.53
Major level: 18.75
Minor level: 17.97
Minor level: 16.41
Major level: 15.63 <
Minor level: 14.85 **
Minor level: 13.28
Major level: 12.50 <
The VIX closed at 15.29 on Friday. The high for Friday was 15.84 or 21 cents above the major 15.63 level.
The VIX would have to move up to around 18.75 for a major top to form.
Having said that, I would expect resistance at the 17.19 level.
At this point, watch the 14.85 on the downside. The VIX would need two closes under this level to drop to 12.50.
The VIX is oversold but it has not tested 12.50. Typically, this level should indicate the VIX is oversold.
SPX:
Minor level: 3,164.08
Major level: 3,125.00 <
Minor level: 3,085.95
Minor level: 3,007.85 **
Major level: 2,968.80 <
Minor level: 2,929.73
Minor level: 2,851.58
Major level: 2,812.50
Minor level: 2,773.45
Minor level: 2,695.35
Major level: 2,656.30
The S & P closed at 2,992.07. The S & P has been struggling to close above the 3,007.85 level.
As you know, that is the next minor level to the upside.
2,998 is a minor level that the S & P will need to close above to head higher. A close today under it and the S & P could drop to 2,968.
Minor support is at 2,949.
Short term trends remain bullish. Look for technical support around 2,958.
QQQ:
Major level: 196.88
Minor level: 196.10
Minor level: 194.53
Major level: 193.75 <
Minor level: 192.19 **
Minor level: 189.06
Major level: 187.50
Minor level: 185.94
Minor level: 182.81
Major level: 181.25
Minor level: 179.69
The QQQ closed at 190.80. A close today under 192.19 and the QQQ should test 187.50.
Minor support should be at 189.06. Watch to see if that level holds.
Technical support should be around 189.60.
IWM:
Major level: 162.50
Minor level: 160.94
Minor level: 157.81 **
Major level: 156.25 <
Minor level: 154.69
Minor level: 151.56
Major level: 150.00
Minor level: 148.44
Minor level: 145.31
Major level: 143.75
The IWM closed at 155.43. The IWM will still need two closes above 157.81 to test 162.50.
153.13 should offer strong support on the downside. And I would not expect a drop under this level.
152 should offer technical support.
TLT:
Major level: 143.75
Minor level: 142.97
Minor level: 141.41
Major level: 140.63
Minor level: 139.85
Minor level: 138.28 **
Major level: 137.50 <
Minor level: 135.84
Minor level: 132.81
Major level: 131.25
The TLT closed at 141.89. A close today above 141.41 and the TLT should test 143.75.
143.75 should offer resistance on the upside.
A move up to test the upper band seems to shape up. The upper band is 149.41.
GLD:
Major level: 150.00 <
Minor level: 148.44
Minor level: 145.31
Major level: 143.75 <
Minor level: 142.97
Minor level: 141.41 **
Major level: 140.63
Minor level: 139.85
Minor level: 138.28
Major level: 137.50
Minor level: 136.72
Minor level: 135.16
The GLD closed at 142.95. 140.63 should be support.
Short term charts are both bearish, and the 143 area should offer technical resistance.
This level is also right around the major 143.75 level.
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
Minor level: 58.60
Minor level: 57.03
Major level: 56.25
The XLE closed at 61.28. Watch to see if the XLE can reclaim the 61.72 level. If it can't, the XLE could drop to 59.
The 30 minute chart is still bullish. And technical support is at 59.
AAPL:
Major level: 225.00 <
Minor level: 221.88
Minor level: 215.63 **
Major level: 212.50 <
Minor level: 209.38
Minor level: 203.13
Major level: 200.00
Minor level: 196.88
Minor level: 190.63
Major level: 187.50
Minor level: 184.38
Apple closed at 217.73. If Apple cannot clear 221.88, look for some more profit-taking.
On the downside, support should be at 212.50. And technical support is around 214.
WATCH LIST:
Bullish Stocks: ORLY, LMT, NOW, MLM, STZ, FB, BABA, HON, KLAC, EXPE, MSFT, WMT, ATO
Bearish Stocks: NFLX, RARE, CLX, ETE, NTGR
Be sure to check earnings release dates.
