Once Again the Bulls Must Prove Their Case

The cash S&P500 formed an uptrending day on Thursday although volume continued to shrink. Over the short run we may have begun another push higher.

We made low yesterday just under the short (red) moving average and at the current support line (bright green). We then rallied and made high for the day very near the Dynamic Gann Line at 1298 before finishing on top of the resistance band between 1289 and 1293.

The Wilder Directional Movement System remains long from 1297.85 while the Parabolic SAR is now at 1276.84. A price drop below that level (which would also be below the current support line at 1280.44) is not expected but would put my under-development trading system in a short position.

I think the market will now try and reach last Monday’s high of 1313; but it will not be easy. After weak resistance at 1298 there are two stronger bands of resistance: 13094-1307 and 1309-11. If the bulls can rally this market past 1313 then the target is at 1319-1326. In conclusion, although I still think the trend is up I am becoming much more “nervous” about the markets ability to sustain this choppy drive up.