There is no volume on this pullback. Wait for support.
PRE-OPEN MARKET COMMENTS THURSDAY – The market rally got over-extended last week and now we are seeing profit taking. The high from a week ago has been slapped down and the open from that candle (key bar) has failed. That retracement came in a matter of days and that speed tells us to be patient. Let this pullback continue. As long as the volume remains light, I view this as a normal pullback in the context a longer term up trend.
Overseas markets were generally weak so the overnight move lower (10 S&P 500 points) should gain traction. Bears want to see nice stacked red candles on heavy volume. This would suggest that we have more room on the downside. Bulls want a nice hard low established in the first two hours of trading. A bullish hammer/bullish engulfing candle off of the low of the day followed by stacked green candles on volume would indicate that buyers have returned. Until we see that type of price action, expect a gradual leak lower.
Powell will testify before Congress today and that is a reminder that they are hawkish and that they could hike in July.
Support is at $430 and resistance is at $434.30 and $437.