Its nice to be right, so far, but gotta keep a few step ahead. The daily chart shows us at the 'light' resistance area I pointed out. We can clearly see the market hesitate at the bottom-end of April/May top.
We are seeing the light resistance, arguably acting far stronger vs some economic data points we have seen. Many people/analyst want to justify this rally due to QE2, I say 'HORSE SHIT!' The earnings we have see so far, w/the exception of GE's revenue, paint a fundamentally strong picture. But we have a lot more earnings to come, especially next week.
IMO, the real resistance will be from the weekly and monthly SP500 charts, near the 1200 level.
After this light resistance, I think we do push higher near 1200. The tricky part is figuring out what happens after we test the real resistance. IMO, we will see a correction at that point, I just do not know by how much. It could be to the 14, 28 or 32 SMAs. Judging by today's action in the 10yr note, I am beginning to believe the 10yr yield will act as an indicator to this.
If a round about bottom develops, this will trigger a sense of 'normalcy' within the big boys to justify a market multiple of 14 or so. Here is where the year-end rally would take place. Remember, SP500 estimates are for $87 a share ($87 x 14 = 1218). But these estimates were in the mist of market uncertainty, and companies IMO have already proven that 87 is too low.