S&P is expected to open with a gap up today between 1645 and 1650. This is the first resistance area that the index will have to test. We do not expect this resistance to be broken upwards easily. We expect the market to make at least on small pull back towards 1640 at least and then break above that price level of 1650 where the upper Keltner channel resistance is.
The most important though price level for the intermediate term trend for SPX is at 1660-66. Breaking above that price level we will be anticipating a push towards 1680-90. Support at 1630 if broken will push prices to 1610-1600, while the first warning sign will come if prices close for at least one hour below 1637. The upward move is corrective and we expect the downtrend to resume. The bigger the upward correction (the degree of the corrective move) the bigger we expect will be the decline. Our most probable scenario sees a lower high near 1680-90 relative to 1710. Our longer term bearish targets are 1470-1380. As always, the form of the decline or rise in prices will determine if the bearish scenario remains our preferred one.
As always, thank you for taking the time to catch up on my thinking.