Market Summary:
The SPX index continues to work within the current “island” with a support/resistance range of 5400/5500. A mid-session dip tested my previously identified support level at the 10dma (ref 5447) and the previous session’s low (ref 5447) as the index hit and held a low of 5446. The index recovered for a late session rally and closed near the session highs at 5469. The hold was impressive and precise. The price action was net bullish, but we need follow through today and tomorrow to confirm that recent market pressure (down ~1% peak to trough in the previous three days) is subsiding. My view remains the same. Market internals are fading as the index sits near all-time highs with a price gap below (5375-5400) that appears ready to be filled. Support at the 5400 level (noted below) is key. A break of this level will produce a potential downside target of 5300 (noted below) in the near term.
Trade Support:
5447: 10dma
5400: Low/Base of the June 12 Gap
5300: Downside Target based on a 100-point measured move and 38.2% Retracement
Trade Resistance:
5500: June 20 High
