$OLLI reports earnings after the close on Wednesday and we plan to hold through the report. A best case scenario (BCS) would be a gap up above current range highs (that holds) on big volume.
Last Friday’s wide ranged candle in the S&P 500 ETF ($SPY) was the third failed attempt to push through $219 in ten sessions. Friday’s high is a clear resistance level and Friday’s low now support.
Although Friday’s close was a nice reversal off the lows, the market remains vulnerable to further selling unless it can push through and close above last Friday’s high.
Broad market indices managed to hold on to Wednesday’s low but remain vulnerable in the short-term to further selling. A strong rally to close out the week on Friday would be ideal for the bulls.
Most indices remain above the 20-day EMA and last week’s low, but a close below these two support levels would likely lead to further downside.
No setups triggered on Tuesday, but we have two new buy setups on today’s watchlist, along with $OLLI, which has been changed from a buy limit to a buy stop order.
The weekly chart of the S&P 500 below shows the 10-week MA sitting about 1.5% beneath the last close, which should act as support during any potential pullback.
The lack of follow through isn’t a big deal, as all indices are in good shape technically, and there are no overbought readings on the momentum indicators we follow.
We have two new setups on today’s watchlist in $LMAT and $LN, along with a few changes to the $OLLI and $RP setups.
Ideal price action following a bullish reversal candle is a morning gap up with follow through to the upside. Let’s see if buyers are willing to step in on strength following a two-day pullback.