The media jumped on the “new highs” bandwagon on Monday as the NASDAQ and S&P made new all-time intraday highs and closed at new highs as well.
The S&P has been flirting with new highs for a few days but Monday’s close now sets the market up to either move above the 2400 level or fall back below it. A lot will depend on energy.
The 10 day chart below shows the present, narrow trading range stocks are in. For most of the past 10 days positive momentum has dominated, and twice the S&P has broken clear of 2400 only to give back the advances.
Tomorrow we should get a better picture of just how much strength the rally has left.
SPX May 15 2017
Oil Prices
One key to the market rally on Monday was oil prices. A bit of weakness in the US dollar combined with discussion by OPEC members on keep oil production limits in place for another 6 months. That was all it took to help push energy prices higher along with the energy sector. That helped the market move to new highs on Monday.
Morning Open Should See Bounce Attempt
For the morning on Friday I would expect a jump in the retail sector before more selling arrives. Overall I think retail is moving lower short-term. Certainly, retail is not the place to hide out the summer months as retail is bound to pullback after any bounce attempt.
Tuesday’s Outlook
I will have the outlook for Tuesday’s posted later this evening but a quick preliminary view points to a dip to start the day on Tuesday, back below 2400 and then an attempt to move higher into the afternoon and close. I’ll know more after a full technical analysis.
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