S&P 500 Index Trading Outlook (3-5 Days): Caution
Potential upside to 3405. A move under 3355 turns bearish ASAP.
Early weakness failed to hold and thus, still no confidence either way just yet.
However, upside should prove limited given the recent Treasury yield plummeting, and upside near 3400 should be strong area to sell into. Under 3355 near yesterday’s lows would put a selloff on the front burner.
S&P daily charts show the attempted pullback from yesterday in Futures, which nearly registered a key reversal after making new highs and then selling off to multi-day lows.
Yet, by end of day, prices had recouped this weakness to hold prior lows. So investors will be on the lookout for weakness Friday.
Worries remain about the extent that recent rapid declines in treasury yields DON’T affect stocks, as historically this has been the case after breakdowns. For now, we’ll stay the course, though with a quicker eye on the exits and any move UNDER 3355 now would trigger sells down to 3300 initially. Gains should be used to sell at 3395-3405.
Twitter: @MarkNewtonCMT
Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
