The DOW30, S&P500, Nasdaq, Russell and NYSE Composite are trading above their short term moving averages. In addition, TICK cumulative for NYA and NDX are rising, signaling institutional sentiment is bullish, as smart money continues buying on the uptick.
Where are We Headed?
This question comes up often, in casual conversation with friends. The simple answer is higher, “if” nothing changes. Barring any unforeseen catalyst, institutions favor the bullish argument.
SPY has been pretty choppy lately.
Overhead resistance comes in at 229.44 then 229.60, where millions of shares in block size traded in recent sessions. R1 = 229.77.
Support remains around 228.93. Monday lows held previous “wick” lows over the past two weeks. We pointed this out in the trading room yesterday.
As long as TICK cumulative continues to rise and price stays above the 9/20ema, we will remain bullish. That said a fade of the opening highs is possible, so watch market internals for confirmation.
NDX shows exceptional resilience. TICKQ continues to rise and price is above the 9/20ema. Until this changes we have to remain bullish.
Finally, we need to remember that the rally is supported by healthy breadth and a relatively solid economic foundation. The biggest caveat remains volatility, which has fallen to an extreme and could spike. It could also stay below its descending 50ma much longer than most bears can stand.
What we are watching for at the Opening Bell. If we don’t get above 229.44, a fade of the opening highs is possible, so watch market internals for confirmation.
Watch List candidates look ready to lift off.
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