The market bears were pushing yesterday and about to succeed as the SPX fell through 1663 but Fed's Bullard touted the virtues of QE and the markets catapult higher with the SPX printing a new all-time high at 1674.93 and new all-time closing high at 1669.16. Fed's Dudley also added bull fuel in the afternoon and now says that a few months are needed before the decision on tapering QE occurs. Obviously, the Fed is the markets. Price is at the top rail of the upward-sloping channel which is a logical place for a pull back. The red rising wedge, overbot conditions and negative divergence (sans MACD line) all say down but with Chairman Bernanke on tap at 10 AM and the FOMC Minutes at 2 PM, both likely pumping QE talk, the markets may continue ever higher purely due to the Fed.
The steeply upward-sloping channel since the April low is the short sellers capitulating and giving up any hope for market downside. This short-covering fuel kicked in when the critical 1597-1598 resistance gave way sending price immediately into the 1620's. The SPX is up about 130 handles in only 23 days, a pace of 6 handles per day of Fed power. The blue lines show support/resistance (S/R) at 1675, 1667-1669, 1661, 1649-1650, 1633-1634, 1626-1627, 1618, 1614 and 1597-1598. Price needs to back kiss the 20-day MA at 1623.24, and rising. This forms a confluence of support at 1624-1626 which acts as a magnet for price. Projection is sideways to sideways lower for the days and weeks ahead but the Fed power keeps preventing markets from correcting. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.