The market is keeping it simple today after a quiet, balancing session on the holiday yesterday and overnight. Above 4658.25, we have a chance of turning this market back north. Below 4642, we head south again to test recent lows. We are trading slightly above 4658.25 at this writing which implies a tiny gap at the open.
We have the mean (21-day Line) sitting down around 4650 and the breakout from the previous-time highs at 4640.75. These are both magnets and areas where the market should find support if we break down out of the two-day balancing range.
This is a time where staying keen on the bond market pays dividends. We still have had bonds, stocks, gold, and the dollar rising together. That is not only rare; it could be a warning of a black swan event ahead.
Swing traders should be in cash, waiting to deploy into the IWM, DBC, and Financials if the bond market stays under pressure.
Day traders, you have your levels for the day. Watch for liquidation breaks and remember that yesterday’s low is weak. Look out for the possibility of the market forming a trading range for a few weeks to digest recent gains.
A.F. Thornton