SPX had a solid day yesterday following dovish remarks about future rate increases from Janet Yellen.
Her dovish outlook as it pertains to rate hikes has been, in large part, the reason for the massive rally off of the February lows.
Volume yesterday on the SPY was notably higher than recent days, but still well below current averages.
The biggest technical development that took place yesterday was the break of the downward trend-line off of the November highs of last year.
Support continues to come in on any and all tests of the 10-day moving average.
The 5-day moving average saw price spike above and through it yesterday.
Follow through today will put SPX on new rally highs.
VIX dropped a hard 9.3% yesterday and is back at recent lows. T2108 rallied back a strong 5.3% yesterday to close at 86.69.
Nce higher-low formed and put in place on SPX 30 minute chart. Will look to establish a higher-high today.
Oil continues to weaken, with USO dropping five straight sessions and six of the last seven. The drop off of recent highs has had little consequence for the market.
Everything above SPX 2040 poses a lot of resistance for the market. However, the market’s behavior and strength in late, suggests that price action will be able to push through.
Overbought conditions have actually managed to work themselves off some in the short-term.
The market so far, is looking like it is working off overbought conditions through time rather than price.
It is very possible right now, that we continue to rally into May before the market sees any strong renewed selling interest, much like the case of 2008 where a similar event took place before the rest of the year was mired in heavy selling.
Bears should be targeting a break of last week’s lows on the 30 minute chart to jump start the sell-off.
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