\tWith that in mind, let’s look at stocks…<\/p>\n
\tStocks<\/h2>\n
\tThe S&P 500 has resistance at 2400. Support is at 2375-ish.<\/p>\n
\tFor the past five trading sessions, the S&P has stayed within a tight, 12-point trading range. Energy is building for a break one way or the other. I still favor an upside breakout and an eventual run towards 2411 or so for the S&P. But, really, it could go either way at this point.<\/p>\n
\tIn order for stocks to break to the upside, I think the oil sector needs to start rallying.<\/p>\n
\tOil stocks have been declining for the past five months. The sector is oversold. And the charts of several major oil stocks look like they’re setting up for a reversal. If the oil sector can attract some buying interest, then it will likely give a boost to the broad stock market.<\/p>\n
\tAs I said yesterday… the path of least resistance for the moment is higher. But I suspect any gains this week will be given up later in the month.<\/p>\n
\tGold and Gold Stocks<\/h2>\n
\tThe gold sector is likely to be volatile after the FOMC announcement this afternoon. Most of the stocks in this sector don’t have much of a pattern on the daily charts. The sector remains stuck in a choppy range, trying to hammer out a bottom.<\/p>\n
\tVolatility<\/h2>\n
\tThe Volatility Index (VIX)<\/u><\/a> actually rose yesterday along with the broad stock market. That’s unusual. A rising VIX usually happens as stocks fall.<\/p>\n \tMy guess is that traders bought options in anticipation of volatility after today’s FOMC announcement.<\/p>\n \tFor now, the VIX – at 10.59 – remains comfortably above its lower Bollinger Band at 8.99. So there’s no threat of a broad stock market sell signal just yet. <\/p>\n \tGDX has been falling this week. But, the MACD momentum indicator has been rising. This “positive divergence” tells us the momentum behind the decline is reversing. This is often an early warning sign of an impending bounce.<\/p>\n \tThe chart looked similar back in early March – just before GDX rallied 5% in only two days. A similar bounce this time around could push GDX back up towards the $23 level.<\/p>\n \tFor the moment, I’m only looking for a short-term bounce in the gold sector. The daily chart of GDX doesn’t look as constructive. A few days of back and forth action would be helpful.<\/p>\n \tI’ll update regular readers on these trends throughout the day on Jeff Clark Direct<\/a><\/em>.<\/p>\n \tBest regards and good trading,<\/p>\n \t \tJeff Clark<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
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