The market looks to open a little lower than is closed at yesterday. All things considered we the bias remains to the upside as the tremendously bearish skew from a few weeks ago continues to get worked off. If you missed the market outlook video here it is.
For the S&P500 the break of the 'W' pattern of 2016 to the upside would send the $SPY, which was only a few weeks ago trying to break $180, back over $200.
The odds of a move back to $200 for the $SPY and 2,000 for S&P500 futures aren't great right now.
The recent pattern mirrors that of the summer and early fall of 2015. Is the market going to repeat itself? It seems almost too easy that the market would rally as it did back in the fall of 2015.
Crude oil still has a lot of work to do - a crude oil rally makes the bullish case for stocks that much more bullish.
That push back on the VIX also keeps the bullish case going.
The $SPY also keeps rejecting lower prices. Look at the nasty wick reversals when support is hit. The next time we hit that support line I think it breaks.
We are in the midst of that bounce. I think it is just a relief rally before the selling comes back. How quick we all forget just how nasty the selling has been in 2016. I think soon we will get a stark reminder of just how bad the selling was as we break down to new lows for the year. For now.... enjoy the relief rally. It's tough to get overly excited about the move as I think we are in the later stages of it.
But there are plenty of intra-day trades to capitalize on the continued volatility in the market.