Price performance is keeping bears at bay so far but nothing goes up on a straight line, above all, when the daily RSI has is above the 70 line and Stochastic is starting to show negative divergence.
SPX is getting close the trend line resistance from the 2007 top.
I have suggested that the 1227-1331 area may be the candidate for a well-deserved multi-day pause.
I am anxiously waiting for the weekly candlestick, tomorrow eod print, which as of today, despite the bullish feast, it is shaping a "bearish" Hanging Man.
Recall that the preceding candlestick was a "White Marubozu", therefore we could have a potential bearish set up in the forming.
I am not calling for a major top though, since if the count that I am working with is the correct one, price is in the process of establishing the top of the wave (3) of (C). Therefore I am looking for +- 1-week pullback, unless the correction unfolds a triangle, in which case it will consume more time.
Hence, in the following pullback price will have to remain above 1267 otherwise something else is "cooking".
The s/t term remains up until we see an eod print below 1306, with a break through the trend line from the December 19 low (TL1)
For the short term I am "working" with the EW pattern off 1280.77 since I think it is the origin of the last 2 impulses up.
Unfortunately the final "touches" are not so clear; maybe yesterday's rally could be considered a thrust out of an "ugly" triangle wave (IV).
I am watching the upper trend line in the 1330 area "hoping" that price will show an ending pattern. If the trend line is broken considerably then there is only "thin air" up to 1347.
Therefore until a crack appear + 2 consecutive eod prints are achieved by the bears the immediate trend remains up
Now it is the time to monitor VIX.
Yesterday it rebounded off the lower trend line of a potential "huge" bullish falling wedge, leaving a bullish hammer.
Also watch the EUR, since the "strong" rebound is getting stretched, with the stochastic in the overbought zone and price at the upper BB.
I think that the assumed wave (B) will reach higher prices maybe in the range 1.3400 - upper resistance trend line but not in a straight line.
Next resistance is at 1.3198