Here is the weekly chart of the SPX for the last 2 years, I have drawn a retracement from the highs in September ’08 to the lows of March. As you can see we bounced off the 61.8% retracement level in the am and sold off the rest of the day.
We have one more retracement resistance level, if you draw from the highs in May to the lows of March (not shown) we have a retracement level at 1050’s which should provide some resistance as well. These two levels are the bears last chance to hold this market down. Once we break above the 1050’s we should have a run up into the 1150’s area at least before any major correction may take place.
I ended up taking the day off, I may take the whole week off. Simply because with key resistance levels and consolidation, it becomes a tough back and forth battle that I try to stay out of if I can do so. Let them fight it out and just jump on the side of the winner, riding the band wagon all the way!