Not much to report today. The S&P500 is back up near the top end of its recent channel after visiting the low end of it yesterday. The 1,545-1,563 channel I’ve been talking about for almost a week continues to be respected, so I will continue to take my q’s from it until it says not too. No sense in talking about something that isn’t happening. I have only 3 observations from today that I’m noting:
- SPX is still below 1,565
- VIX is holding 12.62
- XLF at a pivot point
1,565 is home to the all time closing high in the S&P500. I still expect an eventual move above it. I don’t believe the index has come this far for nothing, at this point kind of has to at least print a few ticks above 1,565. How much higher SPX goes above it depends on a couple of factors in my view: VIX & XLF. The VIX held 12.62 which is key in terms of me continuing to be skeptical of a move above 1,565. If you missed my explanation on why 12.62 is so important, you can find out why here.
As for the financials, as measured by XLF, they put in a new 3 week low yesterday with XLF touching $18.03 but have since bounced. The last 4 days has essentially seen XLF trade within itself, give or take a few cents up or down. What I mean by that is if you take the range from 3/21, it has basically been the range on the 3 days since. This to me is a sign of supply and demand equilibrium and represents a pivot point of sorts for the sector. Above $18.30 and XLF goes higher likely bringing SPX above 1,565. Below $18.03 and XLF goes lower likely bringing SPX to a 1,538 test.
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