Slightly up

SPX managed to gain a few points this week and climbed to the highest level in 5 years. I don't consider the break on the upside significant. Five points it's nothing, SPX can gain or lose 5 points in a matter of minutes. I need to see a clear break on the upside in order to make a big deal out of it. 

For now market remains bullish on all time frames. However, a small pullback is not only possible but welcomed in order to get the ammunition to climb even higher, towards 1,500. 

On daily and two hours charts you can notice the formation of a nice trading channel. The problem is that now SPX is almost touching the upper edge that is somewhere around 1,480 so a pullback is very likely. Obviously a break above the upper edge it will be extremely bullish but on short term I favor a pullback rather than a break on the upside. Another reason I favor a pullback is because SPX is 40 points above the rising SMA 120 on two hours chart. Usually, this is about the maximum SPX can get in an uptrend. 

Weekly chart also shows a slightly higher high that is bullish, of course, for the long term.

Let's have a look now at the dollar since we know that bulls like to see a weaker dollar. there isn't a perfect correlation between the dollar strength and the bullishness or bearishness of the market but a weak dollar favor the bulls while a strong one favor the bears. Dollar is an in a downtrend, notice the negative weekly DMI. However, it has reached now a pretty solid support line so I won't be too surprised if dollar is going to up from here at list for a while. 

In conclusion, market remains bullish on all time frames especially on the long term but a short pullback on a short term is likely at this point. Another scenario is that market could remain flat in the next few weeks allowing the price to get in touch with EMA 25 or EMA 50 on two hours chart. 

All the best!

babaro