In the intricate dance of the stock market, every dip, rise, and plateau tells a story. On Tuesday, February 13th, a narrative unfolded that seemed all too familiar yet distinct in its implications. The market faced a sharp downturn in two heavy waves of selling, triggered by a negative CPI report. This moment of panic, however, was short-lived. By late in the day, a reversal was in the cards as buyers stepped in, igniting a buying spree that lasted the remainder of the week. This sequence of events mirrored the sharp, one-day selloff of late January, which, in hindsight, amounted to a mere blip in the market’s upward trajectory.

In Feb 15th , the $SPX closed at a new all-time high 5048, a testament to the market’s resilience and the prevailing bullish sentiment among investors. With near-term support levels identified at 4920 and 4845—markers of the recent selloffs’ lows—the foundation seems solid. Yet, a more significant support zone lies between 4680 and 4800, promising substantial backup. A dip below 4680, however, could spell trouble, potentially flipping the $SPX chart from bullish to bearish.

Market breadth, often a telltale sign of underlying conditions, has recently shifted from caution to optimism. Despite a challenging “90% down day” on February 13th, the breadth oscillators have now edged into modestly overbought territory, nullifying any lingering sell signals. This move, albeit positive, leaves room for desire. With the $SPX scaling new heights, a more pronounced overbought condition in breadth oscillators would have been the icing on the cake.

An interesting twist in this tale is the behavior of the $VIX. Unlike the selloff in late January, the $VIX experienced a notable spike on February 13th, reaching 17.94 before settling at 15.85, above its 200-day Moving Average. This sudden jump was short-lived, however, as the $VIX plummeted to 14.38 the following day, setting the stage for a new “spike peak” buy signal.

In conclusion, the market’s ability to rebound from the February 13th selloff, paralleling the resilience shown in late January, reinforces a “core” bullish stance on the $SPX. This perspective is bolstered by the positive trajectory of the $SPX chart and the strategic trading of other confirmed signals around this core position.

Amid these market movements, option prices and implied volatility levels have seen a slight uptick, indicating a cautious stance among traders. However, the upcoming week offers a momentary pause from the hustle with markets closed on Monday to observe Presidents’ Day. This break might be a welcomed respite for traders looking to catch their breath after last week’s rollercoaster.

The economic calendar for the week ahead looks light, promising a relatively slow pace. Only a few reports are slated for release, but they include some noteworthy items. The spotlight will undoubtedly be on the Federal Reserve, with the minutes from its last meeting set to be released on Wednesday afternoon. These minutes are eagerly awaited for any hints on future monetary policy moves. Additionally, the Fed’s calendar features a couple of speaking engagements on Wednesday and Thursday, which could offer further insights into the central bank’s outlook and strategy.

As February marches on, the quarterly earnings season begins to wind down, shifting investors’ focus more towards macroeconomic indicators and policy cues.

Here’s a quick glance at the key economic events to watch:
– **Feb 20**: A day of reflection and pause as the markets close for Presidents’ Day.
– **Feb 21**: The Federal Open Market Committee (FOMC) Minutes will be in the spotlight, providing insights into the Fed’s last meeting.
– **Feb 22**: Jobless Claims and Existing Home Sales reports will offer a glimpse into the employment landscape and the housing market’s health, respectively.

As we step into a new week, let’s take the opportunity to recharge, staying prepared for whatever the markets might bring next. Wishing everyone a safe, healthy, and prosperous week ahead. Keep an eye on those economic indicators, and let’s navigate the markets with informed decisions and a steady hand.

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