Surprising strength in the market, which has continued higher despite closing at overbought levels last Wednesday. The S&P (first chart below) closed right at a major resistance level (1070), the .382 Fibonacci retracement level of its all-time high. Much higher and the next big Fibo number, the 50% retrace, is about 100 points from here. Can the market continue higher despite extreme short-term overbought conditions at major resistance? Beating that combination would be impressive indeed, so we’ll lean toward a correction or consolidation coming soon. The Nasdaq and Dow (second and third charts) are also hitting major resistance here, 1992-2000 on the Nasdaq and 9900 and 10,008 on the Dow. Support levels are 1063-1067 and 1058 on the S&P, 1980 and 1967-1972 on the Nasdaq, and 9775-9825 on the Dow.
