Constructive Day in S&Ps
It was a constructive day in the S&Ps today. Although it didn’t completely erase all of the selling from yesterday (today painted an inside bar), we see solid price action and good volume come back into the upside.
We had several days with narrower ranges last week, so volatility has naturally picked up. We may see some additional volatility over the next day or two as the week comes to a close. Because today was a constructive day in the S&Ps resolving volatility to the upside, the coming employment and GDP reports may serve as a catalyst for additional volatility and upside potential.
We expected the rally today, though truthfully, it ran higher than what was anticipated. We can never be perfect in our trading, and especially in foreseeing what the market will do next. That is the nature of trading. It can be difficult to be operate in so much ambiguity, there is no doubt about that. It’s one of the reasons I find mindfulness to be of such value. We have to keep our minds in the moment, and not let what we think the market will do have too great an influence on our trading actions.
What’s Likely After a Constructive Day in S&Ps
Tomorrow is likely to rise higher since the buyers took back control today. Look for a pullback to the 2115-13 area where there has been lots of back and forth over the recent past. If the pullback is weak and price action in that area suggests support, it could be a choice point for a long opportunity.
A deeper pullback could take the market back down to around the 2106 level, or slightly higher. If the market closes below this level tomorrow, sellers are saying they haven’t given up. I think the odds of that occurring are rather low, though, given the current structure.