The strong close on Friday and the S&P 500 created a technical uptrend in the S&P 500. Follow-through be expected on Monday but not a large range day. Look for the market to catch its breath on Monday.
Buyers are back in the S&P 500 on Thursday but can they continue with the positive close on Friday which is the expectation.
The day structure in the S&P 500 implies a market that is then waiting for the PCE announcement on Thursday. The price structure implies an up move for Thursday.
The structure on the daily chart in the S&P 500 implies that buyers bought the break to lower prices over the last 2 days. The next critical test would be high in a close above 5020 in the next 2 days.
In the last 3 S&P 500 sessions sellers enter the market at the highs. The expectation would be a down move on Tuesday but not a large range.
The expected rest day in the S&P 500 on Friday could continue on Monday as the market gets ready for fundamentals coming out during the week. The bias for this market would be a higher close by the end of the week.
The enthusiasm to the upside shown in the S&P 500 on Thursday would not be expected on Friday unless we get very positive fundamentals driving this market higher. A higher close would be expected but not with the same size of movement shown on Thursday.
Starting on Wednesday and through the beginning of the Asia session for the S&P 500 buyers have been present. The expectation is for a higher high on Thursday and the positive close.
The S&P 500 broke to lower levels on Tuesday and bounced off of it slow going into the close. This implies a market setting up waiting for fundamental information that is coming out on Wednesday. The structure implies a market waiting for an excuse to respond.
Look for buyers to continue trading inside the range of Friday's action. It's quiet on the fundamental front and indications are that buyers are creeping back into the market.
With the shortened trading session on Monday in the S&P 500 futures contract look for a quiet inside day for price action as the market gets ready for a full trading session on Tuesday.
Can the upward momentum be maintained in the S&P 500 with PPI being announced on Friday going into a holiday weekend? The bias is still for the market to move higher.
If the retail sales report on Thursday strengthens, the expectation would be an increase in the S&P 500 because it implies a resiliency in consumer spending which represents approximately 70% of the US GDP.
The range for Wednesday in the S&P 500 is expected to basically stay inside Tuesdays range. Without new fundamental information a large moved to the downside like what was witnessed on Tuesday is not expected.
The S&P 500 structure from Monday's movement implies a market waiting for an excuse to take the next move. That excuse could be the CPI report coming out on Tuesday. The bias is still for moved to the upside. It will be interesting to see if this upward momentum can be maintained.
Although the S&P 500 had a clean strong close on Friday, the expectation for Monday is arrest day which would be a smaller range day as the market catches its breath and gets ready for Tuesday's economic reports.
They bought the break on Thursday but will buyers have the fundamental excuses to drive prices higher and to close above 5000 as we go into the weekend. The expectation is that upward momentum favors a higher close.
Another large move on Thursday in the S&P daily chart is not expected. A sideways move is more in line with the overall price structure.