To personify where the market is right now here is a scenario. Remember when you were a kid at the town pool. Every once and a while there was a kid who thought, today would be the day he jump off the high dive. He would walk up to the ladder, the first step would be easy, 5th step would be harder, then as he gets to the platform and he starts to get scared. Now he really is having second thoughts, its a big jump. But now there is a line of people waiting to go, a bunch of people watching; some are cheering him to jump, others are hoping he climbs down to laugh at him.
So the poor kid can either climb back down and risk embarrassment or face his fear and jump. Right now the market has to either face its fear and jump(ie Go Higher) or climb back down the ladder and be embarrassed(market goes lower)
Since the market is in an uptrend and has support below it. Let's say the kid jumps, where does the market go.
The daily chart is making a ascending triangle with 950-955 being the top. A break of this would be bullish. The measured move would be to 978-980. If you make the flag pole from 900 to 950 its a 50 point move to 1000.
On the weekly there is a similar pattern which would take SPX to 976, but 2 points below at 974 is the 50 EMA weekly.
Other positives for the market is that it is above its 200EMA, 200MA and trending with its 20/50EMA. This quick move to these levels would be the final blow to any bears especially the new ones who were shorting at 950. Now that the kid jumped, he will keep on jumping. So if the market breaks out, it might have the confidence to keep on climbing.
But what if the market decides to walk down the ladder and have everyone laugh at it. Can this happen, this is the side I am leaning towards.
First looking at the 60 min chart we can see some topping action via resistance at the 950 level, this area has been strong resistance. Right now the 60 MIN SPX is trading in a channel that is trending up. While this looks bullish, the indicators are showing that the recent move up has had some weakness.
