We are Retesting the August High Now

Although we ended last week strong on price action (the cash S&P500 formed an uptrending day opening on the low and closing just under the high) I was a bit concerned by still lower volume (compared to the previous two sessions). Price Up and Volume Down is not a very bullish combination.

As a new week begins this is my current conceptual roadmap: The bounce up from the August 20th low of 1261.16 will be over by the end of this week (August) without being able to make a new high (go above 1313). At that point we will see a decline that drops below 1261 by early September. More specifically, there are two ways I see us failing to hit 1313 this week. Scenario One: A short decline starts today that holds 1261 and is followed by a bounce at the end of the week. Scenario Two: We rally above 1302 quickly to start the week and then begin to fall sharply. It will be interesting to see how it plays out.

The Wilder Directional Movement System continues to show price in a trading range (non-trending). The Parabolic SAR now stands at 1302.07 and the resistance line has just been broken. As such, my under-development trading system (currently short from 1276.84) will be stopped out on a move today above the SAR.