Within the framework of volatility and volume getting annihilated, the SP500 is also in the midst of making a series of lower-highs. On balance, that's less bullish than where we were in April-May. Then again, that was when an orangutan could make money on the long side. This is tougher. Trading the range usually is.
So how high can we go? Below I have outlined 3 important lines:
1. The immediate term breakout TRADE line = 920
2. Immediate term TRADE resistance = 935
3. The YTD closing high = 946
Given that the US Dollar is starting to fall again (Bernanke has kept the free money on the tables), anything can happen here. For now, I'm playing for 935 - but into month end and an employment report on Thursday (which I think will be better than expected), be careful with those high short interest short positions.
Keith R. McCullough
Chief Executive Officer