The first thing to say today is that SPX returned to hit the top of the daily bollinger band on Friday. This means either that we will now see a retracement, or that further gains are likely to be smaller daily incremental gains as SPX pushes the daily upper bollinger band higher:
On the bigger picture I suspect we are seeing the possible double-top form that I have mentioned a few times since the June low. The second top could top out anywhere between here and the 1440 area SPX pivot, and I was looking at that in detail in my weekend post at MarketShadows here. This scenario gives an overhead target range within another 50 points or so for the move from the June low, on a break over the declining resistance trendline from April that was hit at Friday's high.
In a normal presidential election year we would see a powerful rally for the rest of the year here, and I've talked about that possibility in my weekend post as well. The key there would be a conviction break over that 1440 area SPX pivot to open up a run at the 2007 highs. That seems unlikely here though, and I'd really need to see that conviction break over the pivot to take that possibility seriously.
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