eyes microchips seem pointed at S&P 1100. As we wrote Monday during the morning surge:
Again since resistance nowadays is akin to Swiss Cheese, we won't be using that word. But the resting point of S&P 1110 has thus far proven correct; this is where we've stalled intraday yesterday and today. If you have not nodded off watching this market the past day and a half you will notice we are stuck between 1100 and 1110... 10 S&P points. Just to scare some cocky bulls you'd think we'd see a scoop down below 1100 to trigger a lot of stop losses (including mine), as that is how the old stock market used to work. The current version rarely even offer these small hiccups.
So go forward it's a pretty simple plan - if somehow we could actually fall, short term oriented
computers traders (are there any other kind nowadays?) will be exiting on a break of S&P 1100, and there would be a decent chance at falling down to the 20 day moving average, in the S&P 1080s. Where thankful buyers (I caught the dip! Yeeeeah!) will be waiting with open arms. There is also a tiny little gap just over S&p 1070 which could come into play if this scenario plays out.
Or, on a break north of S&P 1110 level ... the new higher highs buyers shall join us. I would normally say a move over S&P 1110 WITH volume is required, but volume has become a useless indicator for 6 months as most volume is simply HAL9000 trading shares to other copies of his program, while the rest of us are a sideshow.
So we wait, common sense says some pullback would be in order after a non stop assault upward the entire month. Unlike gold, oil is not making new highs, and today we have a session where stocks are down while the dollar is down (rare as a dodo bird lately). These are normally divergences to note, but divergences have also meant nothing in this new paradigm market.
Oh yes... the most important chart on the planet... bulls (who apparently are rooting against America via a lower dollar) want to see $74.50 and below, bears want to see a recovery in the dollar. How backwards it has all become...
[please note - stockcharts.com does not update the $USD chart intraday so this is as of the close yesterday; real time the index is around $75.10]