Pre-Market Outlook 8/20/2021

If we are on the monthly options expiration script, we should hit the low today or Monday and turn back higher and back into the clouds. If the script is changing, then there are other possibilities. We won’t know that for a few days.

The overnight range is inside yesterday’s range, so we will use the overnight high at 4406.50 and the overnight low at 4371.75 as our boundaries today. Holding the 4400 level matters, as we know 4408 is the monthly open and the key to a bull or bear bar for the month. Taking out the top of the spike at 4418.25 would rev up the bull as well. 

If we end up with a bear bar for August, it is likely than one or two more will follow in September and October. That tends to be how it works. 

Then 4389 or so is the halfway point both for yesterday and the overnight range. That could be a bias threshold to work with today. 

Since there is nothing to guide us at the open with an inside global range, let the market settle in a bit before trading.

The macro trend is still positive. This should be a 40-day cycle correction and nothing more. This was predictable as outlined last Sunday. Only time will tell.

Watch the swing low from the 18th at 4347.75. Any action below that and the bears will come out of hiding.

I am out this morning, and don’t typically trade expiration, so the next update will come over the weekend.

Good luck today.

A.F. Thornton