The stock market as represented by the S&P 500 has been pushing ever higher for several weeks. Two weeks ago I thought we might see a pullback before rallying higher. Although it started to pull back, the reaction was shallow. The market quickly reversed and drove higher.
The last three days in the S&P futures suggest that we might see a retracement. The stock market has made no net progress over the past three days, and only minor progress over the past week. We seem to be at an important level here around the 1350 level (see weekly cash market).
The market can react here, or just go sideways for a few days. I think a key level is last week’s close. This is 1340.50 in the March ES contract (Friday’s close). A close below this would indicate some selling is coming into the market and a push down to at least the 1330 level. A failure to react here will likely see the market continue it’s persistent rally up to the April high of 1370.58, basis the cash market.
Have a great Valentine’s Day. Be sure to do something special for those who support you in your trading. Their support is critical, so let them know how much you appreciate it!
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