As you know, equity markets were deeply oversold heading into March’s quadruple witching with most internal technical indicators at extreme oversold levels which resulted in the VIX peaking on 3/18 coinciding with expiration of index related options.

Markets don’t always change direction during option expiration weeks but the current technical setup suggests this week is likely to see the recent rebound begin to stall.

There are 2 noteworthy technical developments we view as important heading into this week.

  • Chart 1: S&P Emini futures are becoming overbought short-term near resistance. We’ll feature the S&P cash index in tomorrow’s note for comparison but the positioning of the 50-dma is noteworthy on the futures.
  • Charts 2-3: Growth beginning to stall/reverse to Value after surging above trend in Q1.

CHART 1 – S&P 500 Emini futures daily

After an impressive oversold rebound short-term momentum indicators, tracking 2-4 weeks shifts, are starting to move into overbought territory as……the S&P futures rally into their next resistance band coinciding with 50-62% retracements of the Q1 collapse AND a declining 50-dmaA pause/pullback would not be surprising to develop near current levels given option expiration and the beginning of earnin...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free