On Friday the SPX closed at 3557.54 or -0.68% after a quick end-of-session selloff that was influenced by the tech sector. As you know that level is pretty much the ES futures point of control from the Friday before last, but many traders are concentrating the loss of SPX 3580. Over the weekend, the bears were out in force, noting rational macro and technical proposals as well as the idea that we can't just float here for very long. Implied volatility measures will give clues to how bearish people are but not the whole picture. It's a whacked-out environment but as things stand, I wouldn't short this on an overnight basis unless some very specific supports were broken in a very specific way.
The weekly area of contention around 3560 and then there is 3580/3590 initial resistance. If we get back on top of the multi-month bracket, we obviously have 3600 and 3630 to deal with. On any further weakness, watch SPX 3500 on a closing basis. It is strong weekly support.
The President Elect's status is due to be certified by more states this week, adding certainty to what many are already certain about. The market continues to treat the horrible virus situation as understood and participants who have put large amounts into the market over the past month seem at some weird or temporary peace with the economic effects to come. Maybe it is the second synthetic antibody authorization and announcements of a third vaccine. They also seem reserved about the policy arguments over support measures that helped the market off the springtime lows, though that situation is given credit for Friday's late day selloff.
PS: That first paragraph in weekend post was not meant to be cryptic. It's just a painful subject. Sometimes protective positioning can spur the index higher. It can work either way, though, and there are many working parts to consider. In some cases, a sudden negative catalyst can work to accelerate a selloff. In the present cause I'm watching more for the opposite. This is a migraine causing subject but there are traders here who could explain it in detail. Just trying to say that this phenomenon of contrarianism has a practical aspect too. Anyway, I don't just bother with our crazy stuff lately -- I just look to see if you're green. Laid back as ever
