Now the Bulls Must Break Overhead Resistance

The cash S&P500 made an uptrending price bar on the daily chart Wednesday although volume declined. Price is now right up against the resistance band of 1289-1296. The question of the day is “Can the bulls break this barrier?” If the answer is no then the strength of this bear market rally will be called into question and the July 28 low may have to be retested yet again before we can have even a chance to move higher.

As far as the Directional Movement System is concerned, we had a bullish crossing of the DI lines yesterday. Wilder says that the point to go “Long” is yesterdays high of 1291.67. Note that this “system” is currently flat.

The Wilder stop on any open long position (which was not based on the two Wilder systems mentioned in the preceding paragraph) is now at 1251.87. Note that my own under-development trading system is flat here since it will only trade with the weekly trend - which is down.