• SP 500 Market Analysis 10-19-15

Technical Outlook:

  • Strong follow through on Friday that put the SPX at new rally highs and setting up for a test of key resistance beginning at 2040. 
  • This represents the bottom end of the range that SPX had been stuck in going back to March through August of this year. 
  • On the weekly SPX chart, there is a nice double bottom that has formed and strong upward momentum playing out. Should the breakout level on the weekly chart at 2020 hold, then the notion of much more additional upside is very possible. 
  • Despite options expiration on Friday, the volume on SPY tapered off some and below average. 
  • SPX 30 minute chart continues to exhibit higher-highs and higher-lows, however the trend line has flattened out some. 
  • 2051 represents trend-line resistance off of the July highs. 
  • VIX dropped another 6.2% down to 15.05. I continue to expect that VIX will ultimately test 11/12 area before seeing any significant amount of selling in the market.
  • Some divergence on Friday, where despite a 9 point rally on SPX, the T2108 (% of stocks trading below the 40-day moving average) dropped about 1% to 65% .
  • SPX now poised to challenge the 200-day moving average in the coming weeks which is right at the year’s breakeven level of 2059. 
  • Weekly Chart of SPX suggests that it needs to close over 2020 this week to clear resistance at that price level. 
  • The Fed has never raised interest rates at a point where the market was trading lower on the year. 


My Trades:

Chart for SPX:

SP 500 Market Analysis 10-19-15

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