Let's Take a Quick Look Around the Markets

After a strong start to the morning, then a feisty fade, we're sitting at opening levels on the S&P 500. Technology stocks have struggled but there's no one major culprit company. Following a couple of strong days, I think traders are calling it a day early. I'm in no hurry to trade anything here, so a quick look at the indexes might be a better use of time. This is coming from a high level weekly view just to ground me heading into the fall.

When you apply color to the price movement of the S&P 500 via the (SPY) dating back two years, it is easier to see how volatile we've actually been. Additionally, the V patterns are evident. After the recent bounce from the $285 area, the question becomes are we in another "V"? The past two bounces have returned the SPY to levels greater than where they started the downturn. If that is the case, then $305 to $310 is in play before Halloween. Given the political and economic backdrop, that's hard to imagine. That being said, until we break below $285 on a weekly closing basis it is different to bearish, neutral, at best. Of course, this doesn't preclude short-term bullish or bearish trades looking for the SPY to test support ($285) or resistance ($300).

Small-caps are seeing a similar bounce off support. The IWM's recent pattern somewhat resembles SPY; however, should the $145 level of support fail, there is nothing but air below it. Add in the bearish megaphone with higher highs and slightly lows and traders have ample reason to be cautious and/or concerned. I would absolutely see trying to play the bounce into the $153 to $155, but I wouldn't give (IWM) much room under $145. That should be considered the line in the sand.

Oil has gained a lot of attention, but it feels much ado about nothing. Crude has traded in this same descending triangle pattern for the vast majority of the year. A close under $52 or above $57 should generate interest from momentum traders. Until we breach either of those levels, I would simply watch the commodity. A push above $57 should be bullish for energy names and help the market as a whole but under $52 and only transport names may be of interest.

And for a little bit of fun, let's trade a quick gander at Bitcoin. It does not appear as if the cryptocurrency has displaced gold as the safe-haven from bonds and equities. After the parabolic run in the first half of the year, Bitcoin is sitting on its own line in the sand. A weekly close below $9500 threatens to erase another 15% to 20% of the huge move this year. Buyers of support here should maintain a tight stop and look to the $11,000 to $11,500 for some profit-taking. There's no need for panic as long as $9500 holds. With Bitcoin only dollars above that level, it's a very big IF.

With the recent barrage of political tweets and market swings, this is a great time for a three-day weekend. Take the opportunity to step away from the market and recharge your batteries. You may need it.

At the time of publication, Timothy Collins had no position in the securities mentioned.