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.
Although the S&P 500 current structure is neutral and implies a sideways move the bias is for moved to higher prices. This is a market waiting for fundamental excuse to move higher.
The S&P 500 futures market structure after Monday's action implies a market that wants to go higher but it needs another fundamental excuse to continue that journey.
Can the solid economy continued to drive the S&P 500 to new highs? Buyers drove the S&P 500 to new highs on Friday. The next 2 days of price action could give us clues about longer-term behavior in this market.
Buyers returned in the S&P 500 on Thursday but can they follow through and give a positive close on Friday. The price structure implies that is what's expected.
After the large move on Wednesday in the S&P 500, a smaller range for Thursday would be expected. After the sprint to lower prices on Wednesday a rest day would be typical behavior.
The S&P 500 market structure implies that it's setting itself up for additional information. What the Fed will do is 50-50. There is a high expectation they will leave interest rates unchanged and they may offer some insights about future action. The bias here in this market is to the upside.
The S&P 500 structurally is setting itself up as the market waiting for information that will be revealed over the next few days. The results of this is to not look for a large move on on Tuesday unless there's new information to create volatility.
After Friday's balanced reaction in the S&P 500, I'm looking for a sideways move on Monday as the market waits for additional information coming from the Fed meeting on Tuesday and Wednesday.
The stage is set for Friday in the S&P 500. Buyers returned but will they follow through going into the weekend. The critical piece now is will fundamentals support this market.
Wednesday's price action in the S&P 500 represent anticipation set up for the fundamental reports on Thursday which include durable goods orders, GDP and jobless claims.