I originally called for here back on May 31. The market is poised to push further into friday as we have quadruple witching options expiration coming. We have seen a steady grind up in the markets and low volatility overall. Traders see this and will take off protective hedges into friday which could further fuel a burst into 1100 SPX. This market momentum is not something to stand in front of and I continue to see traders do just that.
We are setup to see the gap from last October get filled on the SPY and perhaps even then some. If you look at the SPY the gap comes in a bit above 108 and then there is "pure air" between here and about 1110 on the SPX cash index. Which just happens to line up with my SPX 1111 target I've been calling for since August and my "Dow 10k by early Fall" target as seen here in July.
There is broad strength in the markets from sectors such as banks, energy, tech, and transports. These are the sectors you want to be leading. At the same time internals remain strong and stocks making new highs are expanding with each move higher. No divergence yet in stocks making new highs versus the new highs in the SPX tells me we are still running on a full tank of gas, no matter how steep the hill ahead may look.
The dollar is also continuing to make new lows which doesn't hurt either. Commodity currencies such as the Aussie and Canadian dollar are making new highs on the year as well which is why oil, copper, and gold continue to rally. It will be interesting to see if oil and copper can break above their recent resistance of 75 and 3 respectively. But overall I think if we can see 3 out of 4 of the above sectors carry us then this market will go higher. Period. Trade safe.