Wednesday’s massive upside reversal suggested strongly that last week’s pivot low near the 1040 level in the S&P 500 index may have been the bottom. Money Flow measure is also indicating a weak bullish signal. This suggested that over the next couple of days, traders should expect at least a retest of major resistance near the 1100 level.
the S&P 500 index is setting up nicely to challenge the formidable point of resistance at the area of the July recovery high near 1100. The bullish perspective is that a sustain breakout above that level will break the 2-week sideway trading range and could trigger a massive short-covering rally that will eventually push prices up to the next level of resistance near 1131, or the June recovery high.
based upon recent trading actions, the S&P 500 index is setting up for a short-term reflexive bounce. However, unless there is a sustain advance above last week pivot high of 1100, rallies should be considered as opportunity to sell-short or trim long positions as far as we concern
the fact that this week’s correctly anticipated fall only took the S&P 500 index to 1070 before giving way to another leg up shows underlying strength. However, not only there is a significant layer of resistance between current price level and the May 12th high, Money Flow measure remains extremely weak, indicating a lack of conviction among the bulls. So we’ll become short-term bullish if, and only if, last week’s pivot high of 1103 level is overcome.
based upon recent trading actions, market is poised to test key resistance at the 1180 level on the S&P 500 index. That, if taken out (and we think it will), could trigger a massive short-covering rally that has the potential propel prices directly into the important sentiment 1200 level.
