the February trendline has been tested and respected over the last three trading sessions. This bullish technical setup is opening up for a retest of last week high at the 1112 area on the S&P 500 index, then all the way to 1130-1150.

while the overall technical backdrop still favors the bullish case, the upward momentum in the S&P looks like it’s going to wane. So it’s possible that the market is now entering a short-term pullback consolidation period, which might last 2 to 5 trading sessions.

apparently, the lower and upper limit of the short-term trading range had been set between the 1130 and 1150 levels on the S&P 500 index. So, if history is any guidance then we could see at least an attempt to rally back to range resistance, which could take place as soon as tomorrow.

it seems to us to us that equity market is trapped in an increasingly tight trading range between the 1130 and 1150 levels on the S&P 500 index. While seasonal bias will most likely keep the bears on their toes, the near-term bias skewed toward greater weakness than strength as long as the index remains below key resistance at the 1150 level

after a week of mostly negative U.S. economic reports, traders have found themselves overly bullish and are now compensating by taking some money off the table. With that said, the market is now setting up for a short-term pullback correction following recent massive rally. However unless there is a change in trend in the S&P 500 index, buying on weakness is probably the most profitable strategy.