Stocks pushed higher Tuesday, but everything stalled out at an exciting point on the indexes, many ETFs, and single stocks. At the same time, several overbought readings were starting to diverge.
Remember I said we were likely to see follow-through and consolidation this week, and we shouldn’t turn lower until towards mid-week or later, based on the OPEX pattern. That day could come today, if all these levels hold. If they don’t hold, then the S&P 500 could have about a runway to around 4,650. I suspected they will hold, though.
S&P 500
Starting with the S&P 500, it completed what appeared to be a pennant pattern. So one way or another, something will break in a big way Wednesday. There was no more room for this pattern to work. The S&P 500 futures had the same pattern, so we will have our answer before the opening.
You can see that a similar pattern formed in January, and in that case, the break was lower.
Dow Jones Industrials
Also, the Dow Jones Industrial Average moved right back to resistance at 34,800 today, and that was where it stopped. That marked a critical intersection for the Dow. A push above 34,800 leads to another 1,000 point rally. A failure leads to revisiting the lows.
Internet ETF
Additionally, the First Trust Dow Jones Internet Index Fund (NYSE:FDN) also rose right to resistance yesterday, at $188.40 and stopped.
Amazon
On Sunday, I noted that Amazon.com (NASDAQ:AMZN) had to get through a resistance zone of $3,250 to $3,300. Tuesday, the stock stopped at $3,310, which fell into that zone.
NVIDIA
NVIDIA (NASDAQ:NVDA) had a big investors day yesterday, and despite all the hype around the event, the stock was still stuck at resistance around $268.
FedEx
You can see the same thing was even present in FedEx (NYSE:FDX).
Home Depot
The same thing had been present in Home Depot (NYSE:HD), and if this was a leading indicator of what was to come at the moment, it would suggest that resistance holds firm.
