The SPY is trapped between the 50-day and the 100-day MAs. Long term compression.
PRE-OPEN MARKET COMMENTS TUESDAY – If you strip out the August highs and the September lows, the market has been trading in a range between SPY $370 and $410 for the last nine months and it is right in the middle of that range. It is chopping around the 100-day MA and traders are waiting for any news that might spark a move below support or above resistance.
The Fed Chairman is speaking now and there has not been much of a reaction. The market is going to open flat. Fed Funds futures are pricing in a 77% chance of a 25 basis point rate hike in a few weeks. That is a nice reprieve from the 75 basis point rate hikes last year.
JPM will kick off earnings season this Friday. The market bid is typically strong ahead of earnings season.
Longer term swing traders; we might start selling some OTM put spreads in the next week. We want support at $370 to hold.
Day traders, we could see some movement early. “Jerry” is speaking. This is a flat open and we need some movement. 1OP is starting a bullish cycle so let’s see if it can produce anything on the open. We had a nice rally and pullback yesterday. Expect similar today. Watch the volume. It was good Monday. If we have volume, we will have some nice movement. If we have light volume and we are trapped between the low from Friday and the high from Monday conditions could be light. Those are your support and resistance levels. Inside of that range we also have the 100-day MA (support) and the 50-day MA (resistance).