the near-term technical backdrop still favors the bullish case hence further short-term gains likely. Although, given that there are some potential sell signals building on the horizon, we’d remain skeptical of breakouts and looking to get off the overcrowded bullish bandwagon.

the 9 percent plus advance from February low of 1044 on the S&P 500 index could lead to some short-term consolidations within the 1130 to 1150 areas before the market continues its advance. What this means is that given that the upward trend is still intact, the coming pullback should be considered as buying opportunity rather than chances to take profits and get out.

it is possible that the S&P 500 index is now entering the January’s narrow trading range, which was set between the 1130 and 1150 levels, as the market digests the short-term overbought condition. And once this condition dissipates, there is a greater than average odds that the index will take another run at the important sentiment 1200 level.

the market is now turned indecisive just below key resistance at the 1150 level on the S&P 500 index following last week’s massive advance. While the near-term technical outlook is currently tilted toward the bearish case, a single trading session doesn’t form a trend so this is not a call for a major top, rather it’s a warning signal, a sign in which the market is telling us that it’s ready for a pause.

the S&P had rallied directly into the strong band of resistance between the 1130 and 1150 levels. While near-term technical indicators suggested that the broad market index will continue to advance – it would not be a stretch to see the S&P tests the important sentiment 1150 level in the near future –the risk/reward is currently tilted toward the risk side. So we’d look to increase upside exposure on market dips rather than chasing breakouts.