I added a trend line to this chart that I should have put on here after the last minor high was put in place. SPX closed slightly above that line today. This is the third touch of a steeply sloped trend line so a pullback tomorrow would not be surprising. However, this could be a short term double bottom (slightly lower low) at the 200 SMA. The volume pattern is not particularly exciting though. Lets have a look at the 130 min. SPY chart.
This is a different trend line then on the SPX chart above. This one is of much shorter duration. We clearly broke the short term down trend today. A pullback to test the top of this trend line might provide a good long entry. Each 130 minute bar since the low has closed flat or higher then the previous. This means the rally is completely untested so far. We really need to see a meaningful pullback and resumption of the up move before the bulls can declare victory with any confidence. Follow through will be key. If this bounce gets some legs we still have the resistance lines at SPX 1340 and 1357. The 50 DMA is just a little above the top resistance line and would likely be very stiff resistance should we get to it.
Bob
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