SPX Technical Analysis

SPX Back At Rally High

The SPX has rallied back to near 1440. From this point the SPX will either continue forming a sideways consolidation pattern or move a bit higher. There's really no way to know with great confidence which will occur, but this mornings opening gap in the NDX indicates that the market should trade lower, filling the gap, before moving too much higher.

Since we are so far ahead of the market in 2007 we're going to not be greedy and take another small profit. Therefore, as long as the SPX doesn't collapse into the close (below 1430 at our fund cutoff) we'll take profits on all our accounts not controlled by mechanical methods moving them to 100% cash hoping to buy back in again lower.

We realize that there's a decent chance that R1 will not materialize and that the SPX will continue higher for a few days. But we'd strongly prefer a R1/S1 trading range for a while. Wishful thinking maybe...

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