I think we have the chance to rally higher in the coming weeks into the high 900s. We have rallied sharply off the bottom in 3 months time but still its roughly only a 38.2% retracement from the collapse from 1300 on the SPX in Sept 08 to the 666 low in March 09. Its no surprise we are consolidating and moving sideways the last few weeks after hitting that fibonacci level. Next up is the 50% retrace. That will be at 989 and I think if we get over 930ish you should be looking for and expecting 989 coming next. And fyi the 61.8% retracement of the selloff sits up at 1064 so it would be quite the move if we can test those levels but its definitely possible in the next 3-6 months.
On the daily SPX chart the 200 day ema is at 943 and at this point I believe is too close NOT to hit. That is why I have an upside bias going into June. It seems the 870-876 area has and WILL continue to hold as rock solid support. This action we are seeing the last few months is bull market action, so get used to it. We are in a bull market. How long does it last? Who cares. Trade it as it appears.
This week's watchlist:
Longs: CAG, PSSI, MSFT, BEE, ITRI, CPA, DAR, KCI
Best bet: MSFT Buy trigger= 20.87 Stop loss= 19.40 Target= 23