We'll See Price Below 1261 Before We See It Above 1313

There is not much new to report this morning as the cash S&P500 struggles a bit higher. Price action was lackluster on Thursday with lower volume but it was an uptrending day.

Yesterday’s high was at a Fibonacci cluster (see chart) and is overhead resistance again today. Above that the next band of resistance is at 1285-1288 and then not until 1300.

I wrote back on July 28 and then again August 11, “As far as a general roadmap goes I am looking for the recently begun rally from July 15 to last at least until Labor Day (early September) but I do not expect 1440 to be broken.” I am now beginning to lean towards the idea that the rally has already seen at least an interim top and that the current bounce from this Wednesdays low will be over by the end of 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. At this point I don’t think we are in danger of going below the July 15 low because the weekly chart hints that the larger rally from mid-July is still not over.

The Wilder Directional Movement System continues to show price in a trading range (non-trending) and I expect that in a couple of weeks prices will be close to where they are now. The Parabolic SAR stands at 1304.68. My still under-development trading system is short from 1276.84. A move today above the SAR would stop me out (and not go long since the D-wave trend is still down).