Friday's higher close was puzzling due to elevated levels of risk, as demonstrated by VIX, VVIX, the term structure of volatility, and of course, the marked drop in Treasury yields.
Another heightened week of extreme volatility is forecast with the S&P 500 Weekly Option Implied Move at + / - 161, or a range of 3134 to 2810.
The Weekly Trend is down, and the Bias is moving closer to neutral.
With VIX this high, an oversold reactionary bounce is probable. 92% of the S&P 1500 is below the midpoint of its Bollinger Band, and approximately 43% are below the two standard deviation bands. Surprisingly, this is a slight improvement from a few days ago. Further stimulative action (100% probability for another cut next week, and potential fiscal stimulus) should arrest the market, and the lower bound of 2810 is a major confluence Level of support.
The Economic Calendar is normal, and the Fed is in a quiet period before their meeting next week.
Updated Index Levels.
All the best,