S&P 500 Daily Perspective for Mon 22 May 2023

The market has broken out from balance and is now bullish but with poor structure below

May 22, 2023

GDR Model Performance

This year has been challenging for the GDR Model’s style due to low confidence in the market.

GDR Model Outlook

The overall GDR Model is weakly bullish. This could signal potential for a new uptrend, but it’s still not strong enough to confirm.

GDR Model Position

The GDR Model is now long following the market’s additional strength at the end of last week. I would take this as a higher risk position than usual for the model, but process is process - you follow it because over the long-term the odds are favorable.

S&P 500 Futures Market Profile Analysis

Near-Term Outlook: bullish on breakout from balance zone

Alternate Outlook: return to balance zone to repair poor structure below

Key Levels

Bullish: 4226 (Poor High), 4252 (Bottom of Upper Balance Zone), 4264 (Closes Prev Gap Down)
Bearish: 4188 (Top of Lower Balance Zone), 4164 (Weak Low), 4149 (Closes Double Distribution), 4126-4123 (Poor Low and Weak Low)

Market Narrative

At the end of last week, the market broke out from short-term balance and from the greater balance zone. This is undoubtedly bullish as long as the market is able to hold above the top of the balance zone at 4188. Moreover, Friday left behind a poor high at 4226 that is in need of repair.

Breakout and poor high notwithstading, carry forward that structure below has deteriorated even further and is very poor. This can hold for a long time before it’s corrected, and keeping in mind that it’s there will help us not be caught off-guard when/if the market sells-off to repair.

Economic Calendar

8:30am - FOMC Member Bullard Speaks
10:50am - FOMC Member Bostic Speaks
Later This Week: Treasury Secretary Yellen Speaks (Wed), FOMC Meeting Minutes (Wed), NVDA 0.00%↑ (Wed), PCE (Fri)