We note dark pool activity is picking up as the new quarter begins. This bullish flow initiates the elusive follow-through we’ve been looking for. Confirmation if price action stays above these levels (336 +/-).
Summary
SPY 60 Minute Chart
A sustained move above 339-340 would create support (red line) for the bulls. Futures currently suggest a follow-through as SPX 3400 will be taken out this morning. Crude oil is bullish this morning as well, adding to the tailwind bulls have ridden since the Friday reversal.
Volume picked up at the close on Monday.
SPY Daily Chart
The descending wedge led to a potential breakout above 343-344 as noted where volume by price (VBP) becomes negligible as resistance. A move above this (red line) suggests a rally back to all-time highs.
RSI is above 50 pointing to a bullish scenario. MACD and STO agree. Volume has been rising, as dark pool flows increase.
Finally, watch for follow-through in credit card processors. SQ and others broke out. MA and V are set up the best as they are nearest the 9/21d as the whole group breaks out. Wait for SQ to pull in a bit if you missed last week’s break out in the trading room.
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Happy Trading,
Vinny
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