Bulls taking a break

No significant technical change in the last two days. Bulls pushed SPX to 1148 yesterday then gave up 14 points by the end of today. A pretty big drop but without consequences at the technical level. We still have a bullish EMAs crossing and DMI is still positive on hourly chart. The only minor event was the price slipping bellow EMA25. This is not a big deal, price can even move bellow EMA50 without triggering a bearish EMAs crossing but I am mentioning this to you because this is the first time it did happen since September 1st.

On daily chart I see DMI still looking good and, of course, there is a slow uptrend line that barely managed to climb to 1060. This may prove to be a good support level in the future. Of course bulls don't want to hear about 1060 again and they may argue that there are many other good support levels in between such as SMA200 (1116) or 1100.

On weekly chart the uptrend line is around 1090 so we may need to keep an eye on this one as well. The only problem with the weekly uptrend line is that is too steep and it may not be sustainable. Also notice that the DMI made some good progress and moved up to May's level but it's still negative. Two resistance levels here, one around 1135 and the other one around 1145. If we finish the week above any of this level is going to look good for bulls.

What should we expect next? The fact that market cleared the 1130 level is very encouraging but you should keep in mind that once a resistance level is conquered that level does not automatically transform into a support level. For the sake of the bullish long term picture I hope market is going to find a good support above SMA200. It won't be a tragedy if it's going to slip a bit bellow SMA200 but finds support at the most important level of all, 1100.

All the best!

babaro