Hello Everyone,
Yesterday I outlined a potential flat on the SPX suggesting a move back up after testing 3940 but the market was not quite ready to bounce and began with a gap down today. However, that gap was bought (divergent low) and price managed to recover the key pivot area around 3950/55 aided by comments from Fed Governor Bostic who still favors a 25 basis point increase this month. His comments sent SPX/ES above the key 3955 pivot and momentum carried price higher hitting a few posted levels above on ES at 3975 and 3995. So what's next? The bulls need to keep price above that key support of 3950/55 area which corresponds to the downtrend line and 200 day MA and not fumble with initials ES support 3970/75 tonight. Losing the key support likely take the SPX back down to new lows 3900 area. As the market rallied, the US Dollar came off it's intraday highs (appears to be searching for a high here) and TLT managed to bounce off it's intraday lows (searching for daily low) so continue to monitor tomorrow in conjunction with price levels above. I will update the ES levels in trading community later. One other note, the VIX now has five waves down just above daily demand which I will discuss more tonight.
Please take a moment to look at the trade ideas.
