Update

Ok, the past 2 days I was pretty much MIA from the markets. Had some personal items to worry about some personal stuff as I am traveling again soon.

Well, I am still in my short position from 1012 ES that I am seeing down 2 points now after having had gains of almost 30 points on this position. I did hedge in between with some NQ but the gains for that hedge were minimal compared to the losses incurred on open profits. Thats what I get for not watching it carefully.

We have not had 2 days of continuous tests on our previous peaks and the rally in the past 2 days has removed quite a few of the bearish divergences and we now find ourselves back with neutral technical indicators in an uptrend. Based on the price action the past few days and our pull back of 30 points we should expect more upside with a real test at the 1021-1022 range. I have to admit I am a bit surprised at this type of action here and would have expected at least a test of the GAP range at 970-980 SPX. We managed to test the 989 range during our overnight session 2 days ago but decided to rally without ANY pull back off the open. DIP buyers in full force.

At this point it seems not even significant resistance and overhead supply is able to stop this market from moving higher. We have seen a mere week of sideways action to remove the many overbought conditions. Instead of a pull back, time was the only thing that was added to bring the market back into neutral to be able to continue the rally. As incredible as it seems the market has only one goal in mind - higher.

For the bears - while we have significant resistance levels above the bears have no choice but to let this pattern play out until a decision is made for the downtrend. This has been the game for the last 5 months and will continue to be the case. Any IT positions entered even with great timing and price seem to flourish for a few days just to be brought back to break even. I continue to struggle with the decision to let the IT position run or remain on a day trade basis which seems to be the only choice the bears have left.

For the bulls - as mentioned they hold all the cards and are in a position now to take out the previous high made by SPX. We have a good 20 points on the upside before the market is in need to pull back or distribution again.

The key levels to watch for today are the 1021-1022 on the upper ranges. A break here and we need to be ready for another 10-15 points, otherwise this could lead to a start of a larger pull back. However, chances are there for the bulls now to take this market higher instead of switching to profit taking mode.