As I indicated in last weekend's report: My current view is that we continue the bounce started on Friday toward the 3450 area and from there possibly begin another leg lower to new lows somewhere in the 3000/2900 region.
That view has not changed. Internals continue to look weak, though our very short-term indicators like micro1 are on buys. We need the next higher timeframe indicators like micro2 to also to join the buy side for an uptrend to actually stick.
Options data has also been on the bearish side for the past week. Price action is neutral short and medium term but bullish long term. Our composite signal continues on a buy though it has been on the weaker side so far without much follow through. Odds indicator continues to stay long.
So again, there is no change in my view from last week that we are in the midst of a bounce toward the 3450/3500 area and from there we could possibly begin another leg lower to new lows somewhere in the 3000/2900 region.
We should get some clarity in the next few days as to which path the market is taking. Remember also that this coming week Wednesday is WWW: the Wednesday of the week before options expiration week. Usually the market sets a low in this timeframe and sets up a rally into monthly OPEX, which falls on October 16th this month. We could get something similar this time also. Regardless…as always, we will continue to position ourselves as the composite signal and the odds indicator suggests.
In terms of pivot zones, our grey zone resistance is at 3348-58 and then at 3385-97. Support is at 3300-3289 and then at 3260-49.
For Monday, daily pivot is at 3340.5. Resistance R1 is at 3380.5 and R2 at 3415.5. Support S1 is at 3305 and S2 at 3265.
All the best to your trading week ahead.