Here’s what to look for in the action today…

General Trends

Now that the Federal Open Market Committee (FOMC) meeting is out of the way, traders can shift their attention to the French election this weekend.

The bulls are quickly running out of time to make their move. The seasonal winds blow bullish until about mid-month. Then the seasonal patterns turn bearish.

The S&P 500 has been in a tight trading range between 2380 and 2393 for the past six sessions. There is now plenty of energy built up to fuel a larger trending move. I am maintaining my upside target of 2411. But, like I said, the bulls need to make a move soon.

Here in the Market Minute, we look at how the major markets are setting up for the trading day. It’s how I plan to trade my own money.

So, let’s start with stocks…


Yesterday, the S&P 500 tested the support of its 9-day exponential moving average at about 2380. Support held, and stocks bounced a bit following the FOMC announcement. The S&P closed at 2388.

Oil stocks reversed earlier losses and managed to close higher on the day. If the oil sector can follow through to the upside today, then we should see some buying pressure in the broad stock market as well.

Semiconductor and banking stocks led the market yesterday. High-yield bonds also finished the day with a gain. The strength in these market-leading sectors also bodes well for the bulls.

The one glaring negative is the warning sign we’re getting from VIX option prices. VIX call options that expire on May 17th are far more expensive than the puts. Traders are clearly betting on a higher VIX two weeks from now. And a higher VIX usually means a lower stock market.

For today… I think the market is going to take its cue from the oil sector. If oil stocks rally, then look for the S&P to try to break out to the upside of the recent consolidation pattern. If oil stocks falter, then look for another test of the 2380 level, and possibly 2375.

Gold and Gold Stocks

Gold stocks rallied immediately following the FOMC announcement yesterday. But that bounce was short-lived. Gold sold off hard, and the mining sector – as represented by the VanEck Vectors Gold Miners Fund (GDX) – closed down 1%. There still isn’t much of a tradable pattern on the daily or intraday charts of GDX. The sector is just chopping around and trying to build a base from which it can launch the next rally attempt.

At the risk of repeating myself, GDX still needs time to hammer out a bottom.


The price of oil closed yesterday just below $48 per barrel. Take a look at this chart…

This is an important support level for oil. If support doesn’t hold, and oil drops to its lowest price for 2017, then it could tumble all the way down to the November low around $43.

Oil stocks tend to move ahead of the commodity itself. So, strength in oil stocks yesterday could be a clue that the $48-ish support level will hold – especially if they push higher again today.

I’ll update Delta Report readers on these trends throughout the day on Jeff Clark Direct.

Best regards and good trading,

Jeff Clark

P.S. I love to hear your feedback. Send your comments and questions to me right here.