The US Stock market as represented by the March 2013 S&P e-mini futures reached a new high of 1499.25 on Friday. The cash market (S&P 500 Index – SPX) closed up above 1500 at 1502.96. The event was widely reported in the media. The New York Times reported on the new high and also that investors are now returning to the market (NY Times article).
The S&Ps (ES) have been up on close nine days in a row since the last down day of January 14. That’s pretty impressive. It is also pretty unusual. The last two days have made higher closes, but closes have been off the highs, suggesting some selling coming into the market. Although the S&P 500 and the Dow 30 Indices have put in new highs, the Nasdaq 100 has not. It’s been lagging.
Watch the S&Ps carefully early next week. Any daily close below 1495 could start a reaction. If you are close to the market, watch the intraday trading around the 1500 level. If it pushes right though this level, we are likely to see higher prices. All three indices will be rallying intraday then. If, on the other hand, the intraday is having trouble rising above 1500, it could mark the start of a pullback.
Given the robust uptrend, I wouldn’t be looking for a big pullback. We just haven’t seen supply enter the market yet to warrant that. A push below 1490 could take the market back down into the 1480-1475 level next week. A deeper pullback would likely end around the 1468 level, as this is support on the weekly chart.
There is really no resistance overhead, except for the psychologically significant 1500 level. We will see how the market deals with that.
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