Bulls are trying to hold support near 1646. A bullish wild card could come in the form of a somewhat unexpected pro-QE and anti-tapering tone in Wednesday’s Fed minutes.
If support holds, we are open to redeploying some cash at a measured pace below 1685. Above 1685, our model will have us add to our positions in technology (NASDAQ:QQQ), small caps (NYSEARCA:IJR), mid caps (NYSEARCA:MDY), and the S&P 500 (NYSEARCA:SPY) at a faster rate. As of Tuesday afternoon, the bulls still maintained a slight advantage over the bears from a technical perspective. The balance of power may flip if the S&P 500 closes below 1646 for more than a day or two.
This article is brought to you courtesy of Chris Ciovacco from Ciovacco Capital.