recent market’s developments had been positive. This should continue lending support to the ongoing oversold relief rally into S&P 1075. Not only that level represents major price resistance, the long-term trend remains bearish. So rallies should be sold as far as we’re concerned.
the short-term trend for the S&P 500 index is now turned sideways following recent decline. Near-term, traders can play the range. However, given that the longer-term technical bias has turned down after the August 11th wide range bar down day, swing trades may prefer not to hold positions overnight and that rallies should be considered as opportunity to sell short or trim long position as far as we’re concerned.
the S&P is due for a snap-back rally, which might last about 2 to 5 trading sessions. Rebound offers short-term opportunities but it may require exquisite timing in order to protect profits before they’ve evaporated into thin air, if not turn into lost.
our technical bias is that for the near-term, additional consolidation will unfold between 1070 and 1100 levels on the S&P 500 index. The 1100 zone is too big and important to fall quickly. The market will need to correct and base for awhile before the bulls regain the needed strength to push prices up above that level.
it seems to us that the upper and lower limit of a short-term trading range has been set between the 1000 and 1040 levels on the S&P 500 index. Near-term, traders could play the range. Markets however, are volatile and tight stops are advisable.
