That was an entertaining day. Unfortunately, most of the gains were baked in before the market opened. For anyone sitting on the sideline, they missed out on participating in the big show. I was one of those poor bastards. Had we intensified the war with Iran, the market could have just as easily gone the other way. At a crossroads like that, I am perfectly content sitting on the sideline…and I am also traveling. Interestingly enough, if you went long oil or oil stocks today just after the market opened, you would have made money. They paired back their losses most of the day.
The market opened just below resistance and remained there the rest of the day. In the last couple weeks, the S&P 500 bounced off of old support from last September, blew past support from October/November and is now testing resistance at 6800. This was the support level the last few months. In the short run, this rally is a little overdone, and a pull back is warranted. However, to go against a rally this powerful for very long is a fool’s errand. The counter argument is gaps have a tendency to be filled. It would be nice to see a retest of the 6550 level to solidify a base before it moves higher.
On the hourly chart, the S&P 500 is now following an upward channel. A temporary pullback here would not surprise me at all.
The next two days should be interesting. The level of volatility right now is pretty high.
