S&P 500 Trading Outlook (2-3 Days): Watching for signs of price reversals from gains on Friday and into Monday.
The S&P 500 Index (INDEXSP:.INX) held where they needed to Thursday morning allowing for another rally to take shape.
The budget resolution pass resulted in treasury yields spiking while S&P 500 futures (ES) moved up to the top of its expected range. 2470-75 on S&P futures should be provide some resistance. Any reversal into end of day would bear importance. Ditto on Monday.
Resistance: 2570-75
Support: 2539
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MARKET THOUGHTS
Counter-trend signs of exhaustion for the S&P 500 were not confirmed Thursday, as the outsized 17% gains intraday on the VIX Volatility Index (INDEXCBOE:VIX) were promptly reversed by market close as breadth largely finished flat.
As stated, the near-term trend remains very different from the risk/reward. In order to feel better about the setup, we will likely need to see a huge improvement in market breadth.
Key worries from Thursday concern the technical space and the attempted pullbacks in some of the leading tech stocks like Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) – both are acting much more negatively of late. As well, the VIX is getting itchy and has shown signs of being prepared to move back higher. This would align well with sentiment, as many are throwing in the towel on an October correction.
Twitter: Â @MarkNewtonCMT
Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
