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Since the Emini SP500 future ran into 1420 being the last level of resistance to 1441 May 2008 highs, the market touched off at 1419.75 and we have see a 38.2% retracement from this high off the year lows of 1259.75. There has been a lot of consolidation at this level and fight to hold as the struggle takes place to support the March lows as buyers defend this pullback and sellers look at the daily channel that was broken as weakness and have been defending any test of the level. Most recently the market fell to retest the 1352.50 lows made on April 10th, falling to 1354.00. This test broke the trend line from the 1068 lows, however held the 1352.50 level and has since recovered. This is attempting to turn into a failed breakdown, however this range now of 1375-1354 must be supported to hold this low and try to stay above the daily trend line that was briefly breached. Strong resistance comes within 1390-1400 which covers the NFP breakdown as the range that needs to be broken to get the market outside of this trading range and attempt a retest of the 1419.75 highs followed by the ultimate target of 1441 from the May 08 highs. Failure to hold the 1354 lows gives room to target the March low of 1338.50 which matches up with the 50% retracement of the year move.
Keep notice of the US Dollar now testing its daily neckline of its 3 month head and shoulders that has built as the market failed to take out its year highs. Should we see this neckline give out and continued weakness to target it's October lows down to 7500, this will provide the support needed for equities into the next leg up, as we have seen this support the market from breaking down the past 2 weeks. Click to read more on the US Dollar.
