The bulls continue to press the cash SP500 higher, overcoming key resistance at the 1186 level. Does this mean all is rosy? Not necessarily. Take a look at the composite index (middle pane). While the RSI (top pane) has pushed to a new high here the composite is lagging. Should this turn in to an actual divergence a warning would be given that the bounce/consolidation from early August is complete.
While we watch those two indicators note that we are now in a delta pulse. Delta should be the strongest upward pulse in a cycle. If it is not that is another bearish warning. The next upside target area is 1245-47.
Bottom Line: Until further evidence develops or we break 1136.07, I think that the bullish potential over the near term should be respected. My mechanical allocation mix meter is at +50%.
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