SPX lost a few points today but 1105 level did hold. Bulls should not expect this 3 weeks rally to continue without interruption, there is an uptrend line that already made two nice lower lows (ellipse) and two higher highs (cyan rectangles) and price tends to come back to their uptrend line before going further up. The problem is that SPX can't go down to its uptrend line right now because if it does is going to go bellow the key 1105 level and DMI is probably going to turn red again. If this uptrend is going to be for real I do expect SPX to go up tomorrow and for the rest of the week since this is the only way to keep DMI in green.
The uptrend line is too steep to be sustainable on long run. Is not impossible to stay this steep (just look at February-April rally) but is very hard.
Have a look at EMA50 and EMA200 instead of SMA50 and SMA200. The difference between SMA and EMA is that EMA puts more "weight" on the most recent data. EMA50 is rising and is about to cross EMA200.
Just to summarize, I do trust bulls more than bears at this point despite the obvious short term overbought condition. Keep an eye on 1105 level and even more important on daily DMI that needs to stay in green.DMI on hourly chart did turn red a little bit and it needs to turn green today.
P.S. This may be the last article this week. Also next week I am on vacation so take care and I hope you'll have a nice trading week. I am always happy when I hear people saying they made money either long or short. All the best!