The Emini SP500 rallied once again into the top of its resistance line from the past 2 highs this year on the surprises seen 2 weeks ago with "no summers" and "no taper". This led the market into highs of 172675 as shorts capitulated, before seeing a reversal that retraced the market back to where it broke out. Last week, the market fell to take out the lows of 168775 based off those weekly highs of 172675. This retracement gave way for new buyers to come into support the market post the short squeeze as it came back to its breakout point, however the weekly close below 1693 established a bearish engulfment on the weekly charts, and the close below 168775 further setup bearish signals. This sees the market coming down to test its major support of 1668 based off the 162475 lows prior to making these new highs. The trend remains up as the rising wedge tightens. Short selling remains aggressive and going against the trend until the market loses the 162475 pivot low prior to the highs. Once these lows are taken out, the market sees next major support down to 1615, followed by 1553 from the June lows. A breach of the June lows at 1553 is confirmation of this rising wedge being the top to give way to the Cyprus lows down to 1530. Going forward, 1688 comes in as first major resistance, followed by 1713. The fact that the market gave back all of its "no taper" squeeze, shows wall street is losing credibility in the Fed as they appear to be "all in" with their QE programs. This is where new/fresh buyers need to step in to continue upside momentum. The 2nd half of the year has established a bullish bias as it has closed above 1693 for 7 days. To reverse this bias, the market must see 7 day closes below 1613.75.
RISK DISCLOSURE: PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING FUTURES AND OPTIONS IS SUBSTANTIAL AND SUCH INVESTING IS NOT SUITABLE FOR ALL INVESTORS. AN INVESTOR COULD LOSE MORE THAN THE INITIAL INVESTMENT.
