The last week has been interesting to say the least in the indices, especially the S&P 500. The bulls
and bears continue to fight back and forth between 1050 and around 1100 as we head into the end of May. As mentioned before, the monthly close is going to be very important, and we believe it will dictate the entire summer, maybe the rest of the year.
If you look at the chart, you’ll notice that so far the S&P 500 has NOT closed below 1050 in a while. We believe that it’s a key level that will determine whether the bulls keep this up-trend alive or whether they throw in the towel. What’s interesting is even if the market does break above 1100, it really doesn’t necessarily mean that we’re going to retest to the highs. In fact, order to convince me that the market is going to retest the highs, it’s going to have to break and close above 1172. Can it happen? Absolutely. We’re not here to tell you or guarantee you that the indices are going lower. We are just looking at the charts, and right now the charts are telling us to watch, wait, and most importantly, be patient.
