SPX has moved up into the middle of the trading range from back in March. It looks like we have cleared a major hurdle today, but there still could be some overhead resistance up here. One concern I have is the QQQ chart.
As you can see QQQ did not surpass key resistance yet. This has been the strongest index and quite often leads SPX. Since it is showing relative weakness here this bears watching.
Old resistance of SPX 1393 should now be support. We could easily go back and test that level before resuming the rally. If we break that the bears might take control. I think the key level is yesterday's low. With the big gap up it is better to use the SPY low of 138.53. A break below that should send us back to the recent lows.
One concern for bulls should be the overall economic data. UPS gave a major warning about global shipments slowing down. We have also seen the FED regional surveys all coming in lower then expected recently. The weekly initial claims have been creeping up the last few weeks as well. The market has ignored all this for now, but sometimes it changes its mind.
Bob
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