I had anticipated a counter trend rally, but I would be amiss if I was to say that I expected a move of such magnitude.
However, I wish I could say the same thing about the volume.
We remain in a period of slow volume and this, while not an all out negative factor is also
not one that we can chalk up into the plus column.
The pattern we have been getting into lately is finally what the norm is when the market is in a healthy phase and that is follow through in prices the next day after a move like this. We had this pattern over the last short term rally we had and if we can muster this same type of market action tomorrow then it will be a very optimistic sign for the intermediate term.
We have strong resistance on the S&P 500 at the following levels:
1379
1416/1415
1454
1482
1507
From here we need to see how the market behaves with the potential follow through and should we get this follow through then we can expect a consolidation of 1-2% over the next 3-5 days.
Remain 60% invested in stocks and after the next pullback we will assess if our allocation is going to increase or not.
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