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Stocks Facing ResistanceStocks have steadily drifted down from highs at 4327. Retail sales data on Wednesday confirmed the impact that high inflation is having on the economy, and investors are fearing another 75bps rate hike in September. We are seeing a lot of resistance at current levels confirmed by red triangles on the KRI. However, we are also seeing support at 4245, at least for now. If we fall further, then 4188 should be considered a floor for now. We must break out past 4327 to solidify higher levels, which likely won't happen until next week at the earliest.
FX:SPX500Short
by quantguy
How Will Retail Sales Effect Stocks Today?Stocks have pushed higher, spiking up to our level at 4327. However, we have retraced back to the high 4200 handle. The rally appears to be growing weaker. We have some risk off news including Tencent, the Chinese tech firm reporting negative revenue for the first time in history. We also have retail sales at 8:30AM EST, which another data point the Fed will be looking at. A softer reading will weaken the Fed's case to aggressively hike rates, though the headline is only expected at 0.1% . If we do retrace, then 4272 is a reasonable level to expect support, with 4188 a likely floor. If we break out, then 4350 is the next target.
FX:SPX500
by quantguy
Can Stocks Break 4300?Stocks keep edging higher, breaking new relative highs albeit gradually. We broked from 4272 to 4293. The difference between daily highs is decreasing, suggesting a retracmenet could be near. If so, 4214, or 4188 are good candidates for support. If we are able to rally again today, then 4306 is the next target. This would also be the first technical level in the 4300 handle. The market rally seems to be hinging on expectations of a more dovish Fed outlook, especially after the 50bps rate hike expected in September. Housing and retail sales data will help provide a clearer picture this week.
FX:SPX500Long
by quantguy
1
Stocks Open Near HighsStocks opened near highs as investors digest last week's data. We have retail sales and housing data this week, which may contribute to a clearer picture of the Fed's plan for their September meeting. Currently, the estimate seems to be a 50bps rate hike, followed by a potential softening in policy stance. The S&P 500 hit our target of 4272, and seems to be tapering slightly. The Kovach OBV is strong, but has started to level off. If we see resistance here, watch for support in the lower 4200's or 4188. If we are able to break out again, then 4306 is the next target.
FX:SPX500Long
by quantguy
Softer Fed Outlook Fuels Stock RallyStocks have rallied, breaking through to higher levels. The markets seem to interpret recent economic data in a manner that suggests that the Fed is going to cool down their hawkish stance. Right now, a 50bps rate hike is expected for September (potentially the last one), whereas 75bps was not off the table before Wednesday's CPI. This was further supported by Producer Prices. Markets are considering this a green light to rally again. We have broken past 4245, but have fallen just short of our target of 4272. Resistance is confirmed by red triangles on the KRI. The Kovach OBV has picked up with the rally, but it does appear that momentum is stalling. We are due for a bit of a retracement, with 4188 a reasonable area to expect support. If the rally can continue then 4272 is the next target with 4293 and 4306 in line after that.
FX:SPX500Long
by quantguy
How Yesterday's CPI will Impact Stocks and the FedStocks got a pump from CPI data yesterday. The figure came in at 8.5%, one of the highest in history, however the estimate was 8.7%, so it technically fell short of expectations, even though this figure is still well higher than normal. After this reading, the implied probability of a Fed hike of 75bps fell 30%, which gave the markets a green light to rally. Stocks broke above highs at 4188, and are holding in the 4200's, currently testing our level at 4228. The Kovach OBV has leveled off but is still strong. If we retrace, we should have support at our former high of 4188, but if we retrace the range, then 4122 will provide further support. If the rally can continue, then 4172 is the next target.
FX:SPX500Long
by quantguy
Bull Wedge In Stocks?Stocks are tending toward the upper bound of the value area, forming what appears to be a bull wedge. We have been flirting with higher levels in the 4000's established from a value area formed back in June. We seem to have a hard upper bound at 4178, but the Kovach OBV is still strong, suggesting that we have a bull divergence. If we break out, then 4188 will provide resistance. If we can break through that, then 4214 is the next target. We should have support from 4122, then there is a vacuum zone to 4068. If that does not hold, we should have strong support at 4009.
FX:SPX500Long
by quantguy
2
The S&P 500 Edges HigherThe S&P 500 has broken higher, barely edging past 4144, our previous high. We are curently just below the next level at 4178. We are starting to run into resistance here from previous highs in mid June, confirmed by red triangles on the KRI. If we can break out further, we must get past 4188 before we can consider the next level at 4214. The breakout looks labored and the KRI is relatively flat, so there is a high probability of a retracement, unless we see strong momentum at open. If so, watch for 4068 to provide support, but beware of the vacuum zone below to 4009.
FX:SPX500Short
by quantguy
Sideways Correction in StocksThe S&P 500 has retraced slightly from highs at 4144, testing support at 4068, as we anticipated yesterday. We are seeing good support from 4068. We appear to be forming a sideways corrective pattern, a technical corrective phase after a rally from the 3K's brought us back to highs not seen since June. It is likely we will hold this range until stocks can muster another breakout. If that is the case then we must break through 4144 before we can attempt highs from June's range at 4188. If we retrace further, watch the vacuum zone to 4009.
FX:SPX500
by quantguy
Stocks Retrace After Hitting Our TargetStocks have hit our target of 4144, but ran into resistance here. The price action swiftly rounded off, forming a top at this level. We have since retraced back into the vacuum zone between 4122 and 4168. We should have further support at 4068, but if we retrace further then there is a vacuum zone below to 4009. The Kovach OBV has ticked downward with the retracement. We will need more momentum to punch through 4122 and 4144 before we can consider higher levels at 4178 and 4188, which are the next targets.
FX:SPX500Short
by quantguy
1
Can Stocks Continue Their Rally??Stocks have broken out and hit our next level of 4122. We are meeting steep resistance here confirmed by red triangles on the KRI. The Kovach OBV has lifted, and its clear that momentum has returned at least for now. It is likely that the markets think that the Fed may adopt an easier policy now that we are formally in a recession. If momentum continues, 4144 is the next target, then 4178 and 4188. If we retrace, then we have a vacuum zone below to 4068 then 4009.
FX:SPX500Short
by quantguy
Can The S&P 500 Break Out??The S&P 500 has broken out to the upper bound of the range, at 4009. After the uncertainty from the Fed was lifted, and we received our 75bps rate hike, stocks were clear to rally. However, as we anticipated, there was little action yesterday, and they are still respecting the range we identified. We made a brief attempt to rally into the vacuum zone above, but momentum quickly faded and we retreated to support around 4009. The Kovach OBV has picked up, so if stocks can break out further, there is a vacuum zone above to 4068. Watch for momentum at open. If it does not come through then we are likely to retrace deeper into the value area between 3909 and 4009, with 3909 an anticipated floor for now.
FX:SPX500
by quantguy
Stocks Pulling Back, Awaiting FOMCStocks have retraced from relative highs at 4009. We have several red triangles on the KRI indicating some stiff resistance at 4009 and 3978. Volatility has consolidated quite a bit, which is understandable before the FOMC, today. Note that some sources are predicting a 100bps hike, but it should come in at least 75bps. This is largely priced in, but we should anticipate some volatility either way. We should have support at 3909 or in the 3800's. If we are able to break out we must first definitively break 4009, then there is a vacuum zone to 4068.
FX:SPX500Short
by quantguy
Stocks Hit ResistanceThe S&P 500 broke out, testing and rejecting 4000 as we anticipated Friday. We identified 4009 as a likely target, and the S&P 500 hit this perfectly, before retracing a bit. We are seeing the price action round off and potentially a small head and shoulders pattern forming, so watch for a retracement, which could present a buying opportunity. We should have support from 3937, a relative high if so. If we are able to break out again, there is a vacuum zone to 4068, which would be our next target.
FX:SPX500Short
by quantguy
Stock Rally Meets ResistanceStocks keep edging higher, but the rally is increasingly more labored, as we struggle through resistance levels. The price action is 'rounding off' which suggests that a retracement may be near. If so, 3937 or 3909 are reasonable targets. However, we are bordering on a vacuum zone to higher levels, the next target being 4068, which would coincide with lows of the range the S&P 500 held in early June. If we are able to punch through current levels of resistance we should see strong momentum at open, otherwise as retracement is likely.
FX:SPX500Short
by quantguy
Can the S&P 500 Maintain the Rally?The S&P 500 has broken out, testing the very top of the range it has established this month. As predicted yeseterday, we hit our target of 3909. Momentum continued and we were able to hit 3963, before a brief retracement took us back to support in the low 3900's. The Kovach OBV is still flat, suggesting we will need more momentum to continue the rally. Watch for momentum at open. We are still at resistance from the top of the range and if we don't see much momentum at open, we can easily retrace back to support at 3810 or so. If we are able to break out, we only have a few more levels above until the 4K handle which is the next target.
FX:SPX500Short
by quantguy
Stocks Fail to Break OutAs anticipated yesterday, the S&P 500 has rejected highs and sought support 3810, just under the mid point of the range the S&P 500 has been holding for July. This retracement was highly probable because we did not see the momentum follow through at open that it would take to break out higher. From here, we could test lows again, around 3737, which should hold as a floor. If momentum returns, we could test highs again at 3909, and potentially form a bull wedge pattern at this level which could indicate a potential breakout later this week.
FX:SPX500Short
by quantguy