The expectation for Tuesday in the S&P 500 is sideways to higher. However, be cautious on the long side as a potential double top could be forming.
Buyers return to the S&P 500 and Friday's market action. The challenge now will be the expectation of follow through to the upside on Monday. Friday's price action implies that Thursday and Friday's market movement was buyers selling to take profits.
Does the selling action on Thursdays S&P 500 indicate that new sellers are entering the market or are buyers selling to take profits? Friday's price action will give us additional clues about who's in control as we go into the weekend.
After the release of the CPI data on Wednesday buying momentum is picking up in the S&P 500. The expectation is follow through to the upside but not a large move on Thursday.
Buyers returned in the S&P 500 waiting for the next challenge which is the release of the CPI numbers on Wednesday. The bias is for the market to continue higher but how it interprets and absorbs the CPI numbers is 50-50.
Waiting for the CPI and PPI this week to drive the direction for the S&P 500. Although sellers came in on Friday and Monday, currently this market has a neutral opening with a bias to the upside.
Can the sellers that appeared in Friday session in the S&P 500 follow through to the downside on Monday or was the selling buyer selling to take profits before the weekend. Monday's price action will give us answers to these questions.
The structure on Thursday in the S&P 500 daily chart implies the possibility of a strong close on Friday as we go into the weekend. Ideally would be a close above 5260 to 5265
The structure in the S&P 500 for the last couple of days is actually a neutral zone trade which implies a sideways move however the structure on Wednesday implies a bias for moved to the upside on Thursday.
The smaller range on Tuesday in the S&P 500 implies a loss of momentum and the market catching its breath. This structure means that if you're on the long side be cautious. The expectation is for sideways move.
It appears that the S&P 500 price action indicates the market is adjusting to the outlook that interest rate cuts may happen later in the year. The expectation would be another day higher on Tuesday but not a large range. The estimate for the high would be 5225 to 2530.
Although there was a strong move on Friday, a small positive up range is expected for Monday in the S&P 500.
Can the buyers that appeared in the S&P 500 on Thursday continue its momentum up with a stronger close on Friday. This could be a challenge with the softer opening in the Asia session.
After the volatility seen on Wednesday in the S&P 500, the expectation is that Thursday will be a day for the market to catch its breath before labor numbers come out on Friday. This means trading inside Wednesday's range on Thursday.
With the Fed making announcement on Wednesday, volatility would be expected in the S&P 500. A change in the feds attitude towards interest rates being high longer is not expected.
In the S&P 500, a quiet day is expected on Tuesday as the market focuses on Fed commentary coming out on Wednesday.
Although there was a rally later in the day in the S&P 500 which implies buyers moving the market higher going into the close. The overall structure for Friday implies caution if you are on the long side. It's important that the market does not return to Friday's Lows on Monday to maintain momentum for continuation to new highs.