Not the What But the How

The initial overhead resistance that we encountered this morning on the S&P 500 should not come as a surprise, given that we have bounced in a straight line off of last week’s 1249 low. The real issue is whether we consolidate for a bit in a quiet way, without bears being able to take much control at all, or if we simply roll over again.

Thus far today, the former scenario is clearly prevailing. If we can see another day or two of this type of action, I suspect we will quickly see some enticing long swing trades set up. The key is not to jump the gun, though. This morning has been healthy action after the past few days of rallying, but one morning is probably not enough of a time to consolidate before we can go plowing through the overhead supply that sits above 1300.