The SPX is sitting right at 1100. It is the midpoint between the markets high and the correction low. A perfect 50% retracement, all made since last week. If the bounceback rally were weak, it may have only bounced to make back about 1/3rd of the loss before going on to make a new range low. Instead, the major indices are overbought and pushing on resistance while bearishness abounds.
I’m not remaining near-term bullish simply becasue market participants are getting bearish. Rather, I believe we need to define the upper portion of our new trading range. Sure, we’re running a flag formation that some may perceive as bearish, but it could also be interpreted as a new and pretty near-term uptrend. Ahh, but there’s that overbought again.
As you know, markets love to ramp when they’re overbought if the path of least resistance is higher. And vice versa. So expect some time to pass–maybe only a few days–of no progress or a pullback to 1080 or so to work off the overbought before moving up and over the 1105 area of resistance. Our target remains the 1120 area.
Maybe we should just forget everything we know about technicals and fundamentals and just do exactly the opposite of what the dollar is doing…Simple, huh? More later…
If you enjoy the content at iBankCoin, please follow us on Twitter
No dip, just a few hours of pause. But we are hovering near 1105 which is big resistance. Gotta run up into the close and then option expiration tomorrow will be a squeezefest!