UPDATE: 1:00 PM PDT
Should see a little backtest here, possibly down to 1292, before the next leg up. We pushed to 1296.80, just shy of the 1298.61 and 1297.62 highs from the 14th and 15th. So, natural for there to be some momentary indecision about whether we'll be able to establish a higher high or not. I continue to believe we will, with my target still at 1320 or so.
We'll keep an eye on the technical picture, currently getting a little frothy but not necessarily topped out. A 5-7 point breather should relieve some of the froth and give us ample room to continue the push tomorrow. Here's the updated daily chart. The path to 1320 and [c]/2, which looked so far-fetched two weeks ago...
is looking decidedly "near-fetched."
UPDATE: 9:30 AM PDT
As we climb past 1290, two things. First, a backtest is to be expected. Second, keep an eye on the technical indicators. Rallies tend to be contained at around 60 on the RSI. Check out the asterisks on the chart below. Also, note the diverging downward trend of the RSI and MACD/Histograms. And, the fact that ADX is on the downswing - meaning the momentum is waning as the market rises.
Also, I forgot to mention earlier that we completed the H&S pattern on VIX -- the one with the upward sloping neckline. Should give the bulls a shot in the arm. The flat neckline pattern will complete at around 18 and should be just in time to trap some bulls into a falling market.
Stay groovy. Meaning, as we approach 1300, it's a good time to review stops and plan out the next couple of days.
We've completed both a bullish inverse H&S and a bearish Gartley. Battle of the chart patterns. Also, the hourly SPX is bumping up against its 200 period MA. And the daily is bumping up against an important trendline drawn off the 5/5 lows. It previously supported the market on May 17, 23-26, 6/1 and 6/2. Turned to resistance on 6/3 and stopped the 6/21 and 6/22 rallies.
Should at least take a breather here while the bulls work up more courage and the bears consider drawing another line in the sand.