The rocket-fueled rally continues this morning, with today’s rally marked by very strong breadth and advancing volume ahead of declining volume by more than 10-1 as I write this.Sooner or later, the bulls will run out of steam, the bears will get tired of retreating and we will have some semblance of a top. With S&P 500 (^GSPC: 986.75 0.00 0.00%) 1000 just around the corner, tomorrow the last trading day of the month and a number of overbought signals being pushed to extremes, today or tomorrow looks like a good place for any bears left alive to make their stand.
The chart below shows that since the March lows, five of the major indices have rallied from 43% (Dow Jones Industrial Average) to 64% (Russell 2000 small cap index).In addition to being a nice round number and source of psychological support and resistance, SPX 1000 also marks exactly a 50% rally from the March bottom. If the bears cannot keep the SPX under 1010, then there is very little in the way of resistance on the way up to 1050.I expect a line in the sand soon - and I expect it will have some staying power.
No comments:
Post a Comment