Yesterday the market had a lot of travel or range. It ran up, and then fell back.
Today the stock indexes gapped higher and held their higher open.
If you’re looking at the day-to-day point gains and losses in the indexes, you may be thinking that this market is too ‘crazy’ and volatile to trade.
However, if you step back and look at the data in the SPY, QQQ, and IWM, today’s range from high to low was on the smaller side relative to the last couple weeks.
More importantly, it was a consolidation day at the high end of the markets’ last week of trading.
This makes tomorrow an important day to watch for a big move.
As you’ll read in the comments about the ETFs below the key ranges to watch were not broken today.
However, today’s consolidation right below the highs the multi-week ranges that have formed in the SPY, QQQ and IWM sets these markets up with potential for a trend day tomorrow.
Watch for a trend day if today’s ranges are broken. Since a move higher would represent a breakout of a multi-week range this is the direction I’d focus on.
However, until the break happens, the markets are just consolidating in a range.
Be patient, and vigilant.
S&P 500 (SPY) Held its gap open nicely. Still needs to break 266.75. The tighter range to watch for support and resistance is 258-265.
Russell 2000 (IWM) Levels to focus on are 154 and 148.
Dow (DIA) Levels to focus on are 235 and 246 then 248 is the 50-DMA.
Nasdaq (QQQ) Highest close for the month – 162 would be a big breakout. Support around 158.50 then 153 is the big low level.