Option Investor
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This morning's gap up and quick run higher (nabbing stops just above Friday afternoon's high) has been reversed and the move down is being led by commodities, banks and transports. On SPX this morning's rally was stopped once again by its broken uptrend line from March 6th through the March 30th low. It looks like another kiss goodbye. It's now threatening to break the slightly lower uptrend line through the April 1st low near 818. A retest of the overnight low for ES, at 802.25, would have SPX dropping to about 806 which would be a break of the 810 key level and confirm the likelihood of further decline.

But the pattern of the decline from last week's high is very choppy and corrective looking. That leaves open the possibility that we could get a strong reversal back up at any time and rally to a new high as part of a rising wedge pattern for the rally off the March low. While the rising wedge pattern would be bearish it could still result in a new high into opex week before we get a stronger decline. Stay aware of that possibility if you're short the market. SPX back above 830 would be a bullish move.

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