While the market did try to push lower, it did not get below the 1029 level (which as mentioned in last weeks post) would have indicated a strong bearish bias if the level was broken.  That level was brushed by the market but quickly retraced higher.  We have moved up and closed right at the resistance level of 1070-1073.  This is a pivotal level.  If we can move above and hold above it for a day, this would indicate another swing higher.

On a move higher, resistance/targets are 1077 and 1085.  Moves beyond that will challenge former swing highs at 1091, 1095, and ultimately 1098-1100.

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The average range for a week on the S&P right now is about 40 points.  This means if the market does collect steam as it moves above 1073 it is well within the grasp of the market to reach the 1100 mark once again.  Targets/resistance beyond is 1105 then 1111-1113.

There are still warning signs this market is going to correct, thus we need to be aware that a move below 1065 indicates the possibility of a pullback.  A pull below 1065 indicates a move to 1062, with a further move down testing 1060-1058. The bias shifts downward if 1058 is penetrated.  This would signal a move to 1047-1045.  Further target/support would be at 1036 and then once again 1029.

Cory Mitchell, CMT
Chief Market Strategist
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The sham of a GDP number (see: http://vantagepointtrading.com/archives/2055 ) gave false optimism on Thursday ; the reality of the situation is more congruent with Friday’s action.  But let’s look at the technicals:

Rallies on the S&P 500 in the upcoming week can be expected to experience resistance at 1042 and if that fails to hold then 1061.  A rise beyond that in the current climate is unlikely, but is (small percentage) possible.  A rise above 1070 would signal this market has plenty of buyers (or short coverings) and is good for another move higher.

Even Chuck Norris is short....but I am not gonna tell him.

If Monday trades through 1032 it is likely the market will continue lower, although this is not really an important technical level.  A continued move below 1029 points to a test of former swing lows at 1020 and then beyond that 1005-1000.

Based on a daily chart trendline the uptrend was still intact until Friday.  A down day on Monday indicates the trend has in fact been broken and we are due for a larger correction.

Happy Trading,

Cory Mitchell, CMT

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