Another short-lived pullback. The biggest risk for the bulls here is that the rally could “wedge out,” making the upper trendlines forming on the major indexes important resistance. The levels to watch are 2486 on the Nasdaq, 12,625 on the Dow and 1452 on the S&P (first three charts below). Those patterns also give us important support levels to watch: 2456 on the Nasdaq, 12,453-12,470 on the Dow and 1438-1440 on the S&P. Tomorrow could turn out to be a pivotal day, as there’s not much room between the top and bottom of those patterns. Bond yields (fourth chart), meanwhile, are stalled at their 200-day average but not turning lower at that important resistance; which way on tomorrow’s PPI report? Yields’ ability to hold here suggests that they could break out.
