The market has no direction and it is chopping around the 50-day MA. Traders are not likely to place big bets today.
PRE-OPEN MARKET COMMENTS TUESDAY – The SPY closed above the 50-day MA yesterday and the overnight dip is going to test it this morning. Traders are going to wait for a major round of news in the next 24 hours and this could be a dull session.
AAPL is going to release a new iPhone, CRM is hosting a big conference, the CPI will be posted tomorrow and the ECB rate decision is scheduled Thursday.
ORCL posted earnings after the close yesterday and the stock is down 10%. That is weighing on the market and tech stocks this morning.
My comments are relatively brief this morning because I have no clue of which way the market is going to break. This could be a double top lower high that results in a test of the 100-day MA in a couple of weeks or it could be a bullish flag where we test the 52-week high. Buyers and sellers are paired off and the 50-day MA is a magnet. We have crossed it many times in the last few weeks.
My market bias is neutral and I am expecting a breakout from this wedge formation next week. This is triple witching so we are likely to get a trend day this week. That will be a good day trading opportunity, but I suggest keeping your swing trades to a minimum.
From a day trading standpoint today, we have to see what happens at the 50-day MA. Overseas markets were generally flat with marginal gains and losses. If the 50-day MA fails with ease on the first attempt, that would be slightly bearish for the day. If we get an instant bounce off of the 50-day with heavy volume and stacked green candles, it would be bullish. Unfortunately, I am not expecting either. I believe we are going to chop around today and finish near the 50-day MA. That will leave everyone guessing and traders will wait for the overnight news. Volume is the key. If we have it, the market has a good chance of making a sustained move. Without volume, we are dead in the water today and we can expect choppy two-sided moves.
Support is at the 50-day MA and $445. Resistance is at $448.50 and $450.