SPX has had an amazing run the last few days and I understand that this move up from the 1991 low is the strongest thrust up in over 5 years. A move like this is akin to an extended trend day, in that there is no shortage of counter-trend setups, but these all tend to fail until the move is nearing the end. We've had some weakness this morning, and an impressive range of 60min sell signals have fixed across the indices, but there is a much higher than usual risk that these won't deliver a decent retracement. On the bigger picture this move is very likely to need higher, and any retracement here is likely to be a dip to buy.
If SPX manages to push up through the negative price action this morning then SPX has been on a daily upper band ride for the last two days, and if that is to continue today, then I'd expect a touch of the daily upper band at 2164 before the close to maintain the band ride. SPX daily chart:
On the 60min chart both RSI 14 and RSI 5 sell signals have fixed, though the RSI 14 sell signal is weak and may need another high on increased negative RSI divergence. If we see more downside today then first support is rising support from the 1991 low, currently at 2140. If we are to see a deeper retracement then that would break and I'd then be looking for a reversal pattern to form, with one eye on the possible H&S neckline in the 2135 area. SPX 60min chart:
The maximum I'd be looking for on any retracement here would be a test of the daily middle band, currently in the 2090 area. Any dip we see here should be a buy into a new all time high.
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