Sellers Strike First – Choppy Action on the Horizon
Sellers have first movers advantage out of the gate in post Labor Day trading, which typically represents a period where the majority of market professionals jump back into the driver’s seat from their summer vacations. In early trading, all of the major averages exceeded -1% losses to the downside.
Here’s the technical picture of the S&P500 ($SPY):
Given today’s reaction at prior all-time highs, we find ourselves selling off back into the middle of this multi-week range with resistance up around 248, support down around 242, and the midpoint of chop (point of control) at 245.
In isolation, today’s trading is clearly bearish and it has halted the rally from last week and prevented the S&P500 from cleanly breaking out and escaping these prior levels, however when taken in context with the past couple of months, it simply suggests more of the same.
Choppy sideways action and further consolidation.
The lows and highs from August are the areas of interest, everything in between I’m looking at as noise. For what it’s worth, I’m still seeing more evidence leaning me bullish, but that could shift could quickly.
Good luck out there.
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