How Do You Like Your Gaps?

Well we got a runaway gap in the markets as the SPX raced right thru all sorts of levels alllll day long and ended up closing up around 910. Although the volume was less than strong you cannot ignore price action like we saw today. At the same time the VIX collapsed to close near 30. Yes, the long weekend is being priced into the VIX but let's not be mistaken; it got smacked.

For now it looks as if the 875 level and 20 day ema on the SPX held as support and the market looks poised to continue higher to challenge recent highs around 930. We still have then downtrending 200 day ema up at 947 as well so keep an eye on that. Indicators on the SPX switched a bit more positive after Monday even without fully getting oversold recently. The Nasdaq was also a leader on the day as the QQQQ is now above its 200 day and looks extremely bullish above 34 imo.

For Tuesday I would have an upside bias with the expectation that 900 will hold on any pullback. The pivot on the ES futures sits at 901.75 and should show strong support for the market if it is to continue higher. This 910-915 area has some resistance from last week but above that and we could easily see 930 come into play by the end of the week.