Yesterday the market showed its first sign of life. It is opening above SPY $500.50 this morning and I would feel comfortable taking starter long positions today.

PRE-OPEN MARKET COMMENTS TUESDAY – I need to start off with and important note. There is no reason to buy the open. Almost every gap up in the last two weeks has been faded. This one is going to be challenged as well. Here’s what I want to see. If I get it, I will take starter long positions.

We want this opening gap up to hold as much as possible. 1OP for SPY M5 is going to start off on a bullish cycle and that should prop the market up. If the gap up is able to hold the $500.50 level for the first hour, that would be a sign that buyers are interested. We want any pullback to be very stubborn with tiny mixed candles with overlap. That would be a sign that sellers are passive and that buyers are present. We do NOT want any long candles during the first 30 minutes and we don’t want more than half of the gap filled. That will be a sign that the gap up is not that strong.

What if the market gaps up and keeps going? We have had a dip the last two weeks and that is certainly possible from this level. There is no need to chase the open. There will be a dip at some point and we can enter there.

Earnings season is in full bloom this week. We are going to hear from every sector. TSLA reports after the close today. It is not going to scare shorts. The news for TSLA has been bad recently and they are slashing prices. Tomorrow we hear from META. Thursday we hear from GOOG and MSFT. I believe that AI is going to keep a bid under these stocks.

We have GDP on Thursday and this is the first look. It will have a market impact. We also have the first look at the PCE deflator Friday. That will be important.

There is plenty of news coming out this week and it will impact the market. I feel that the recent drop sets up for an excellent bounce. The rally from November through March was not a fluke. The economy is strong and profits will be robust. This is a normal dip in a bull market and I am treating it as such. I am not guessing that the market will bounce, I am entering small starter positions on technical confirmation. If the bounce starts to unfold, I will add knowing that my average cost is below the current price and that I can always stop out for a scratch if I am wrong. I will be evaluating the bounce. If it is strong, I will add. If it is weak, I will guard my profits and I will exit if the market can’t blow through the 50-day MA this week. This is an important point.

I DON’T WANT TO POKE AT THE 50-DAY MA, I WANT TO BLOW THROUGH IT!!!

I will add if we blow through it. Then we’ll see if we can get back to the all-time high.

Here are my final thoughts. We are likely to get a wimpy pullback this morning. That bid check will run its course and $500.50 will hold. I will look for strong stocks and I plan to take starter longs if this scenario plays out. If the market rebounds and we easily make a new high for the day after an hour, I will look for a steady grind higher. I am aware that major news is pending this week and I don’t need to chase. What looks good today can change in an instant if the earnings reactions are poor. I will add on technical confirmation and I will watch how we approach the 50-day MA. I suspect that there are many shorts and when the market bounces, they will have to cover. That will fuel the bounce.

Support is at the 100-day MA and SPY $550.50 and resistance is at the 50-day MA.