Coach Mark here.

We have no shortage of news headlines impacting the market right now. Headlines out of the Middle East, economic data points, earnings, Fed speak…not a shortage of headlines to help move price action overnight and during the day. We saw this play out yesterday as the market gapped up only to turn south as headlines pointing towards Israeli retaliation hit the newswire and turned the intraday price action.

We are going to have a lot of headlines in the next couple of weeks. Some of them will be positive and others less so. The bulls need a few of these positive headlines to hit sooner than later or it feels like we are destined to go visit the 100-day moving average on the S&P 500 which aligns with the rising 20-weekly which are approximately two percent lower from here. When price enters moving average pockets (the space between two major moving averages), price tends to fill that pocket. When the pockets are large (as we have now) the downward price action can feel dramatic.  

When support gives out the market tends to go find that next support level and test it. Positive news can thwart this journey as it can ignite buying that reverses short-term negative momentum. Earnings, positive news out of the Middle East, or Jay Powell speaking today all serve potential sources of that positive news. Without it, the market will likely search for the next support level to see how it has been doing since it last visited it.

We will continue to break it all down on the Halftime Report this week. Have a fantastic Tuesday and let us know if you need anything at all.

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Chart of the Day: S&P 500 Futures (/ES)

One of the problems with up trends that are strong is they create large moving average pockets. The trend feels great at the time but it is important to tighten up and break out the volatility playbook when appropriate as those moving average pockets can get quite large and when price gets within them volatility can accelerate.

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