The SPDR S&P 500 (NYSE:SPY) was inching slightly higher Wednesday, continuing to consolidate Monday's 1.43% surge, which was driven by consumer inflation expectations hitting a 2-year low.

While bulls came in to by Tuesday's slight dip, the intraday tick higher on Wednesday morning took place on lower-than-average volume, indicating a current lack of momentum.

Whether or not the market will continue higher imminently or continue to trade sideways remains to be seen, but the SPY is flashing bullish signals on the daily chart, while trading just under the Jan. 4. 2022 all-time high of $479.98. The ultimate outcome is likely to be seen on Thursday when fresh US consumer inflation data is set to print at 8:30 a.m. EST.

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More experienced traders who wish to play the SPY either bullishly or bearishly may choose to do so through one of two Direxion ETFs. Bullish traders can enter a short-term position in Direxion Daily S&P 500 Bull 3X Shares (NYSE:SPXL) and bearish traders can trade the inverse ETF, Direxion Daily S&P 500 Bear 3X Shares (NYSE:SPXS).

The ETFs: SPXL and SPXS are triple leveraged funds that track the movement of the SPY, seeking a return of 300% or –300% on the return of the benchmark index over a single day.

It should be noted that leveraged ETFs are meant to be used as a trading vehicle as opposed to long-term investments.

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The SPXL Chart: While SPXL negated its uptrend on Jan. 5 by forming a lower low, the ETF regained the eight-day exponential moving average on Monday and on Tuesday, SPXL printed an inside bar pattern. The inside bar leans bullish for continuation higher because Tuesday's candle was created near the top of Monday's trading range.

• On Wednesday, SPXL was attempting to break bullishly from Monday's mother bar but on low volume, which could indicate further consolidation is needed. If consolidation continues through Wednesday, a larger move higher is likely to come if the market reacts positively to Thursday's data.
• If the market reacts negatively and SPXL falls on Thursday, Wednesday's high-of-day will serve as a lower high, which will confirm a new downtrend. If that happens, SPXL is likely to fall under the 21-day EMA, which would be a warning sign for short-term traders.
• SPXL has resistance above at $106.80 and at $114.04 and support below at $99.21 and at $94.43.

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