As mentioned in the 11/02 post, the SPX was rather overbought in the short term, and as fate would
have it, it has hit a speed bump which has broken the uptrend based on closing prices. SPX
As shown, the market failed in its first test to hold above the newly regained resistance level of 2100.
It should come as no surprise if the SPX was to struggle a bit over the next week or two either through
consolidation or a search for short term support. It has come a long way in a short period of time.
There could be a test of the newly rising 200 day m/a which sits a little below the current level around
2080, or there could even be a more formidable pull back into the high 1900s, which would still
leave SPX in an uptrend captured by the very wide range seen over Sep. / Oct. A development of the
latter sort might alarm a number of traders, but it need not be alarming as it might be suggesting
the SPX is set to follow a modest, but volatile uptrend for a while. There is no forecast from me
here, just the outline of a couple of interesting possibilities to think about in the wake of a very
unsteady three month period.
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