Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
There is a lot of volatility around this level. If you recall in late February the S&P 500 pushed slightly above it, bringing in the “buy on new highs” investors, only to encounter the first real setback of 2012 in early March when the index quickly dropped to 1340. Then on the second attempt a few days later did the actual puncture happen.
Fast forward, 11 of the last 20 sessions the S&P 500 has touched 1370, either on the way up or down.
We’re at the same place we were Friday, not much to do with this market – it can chop and flop around for 15-20 pts either way. Traders are keying on 1357ish on the bottom side and 1394ish on the top side. Until we see a sustained “follow through day” that holds, all rallies will be in doubt – although I am sure some will be violent to the upside as markets are prone to do.’
I’d also note that the high of May 1st was the first “lower high” of this very long in the tooth rally. While the broader Russell 2000 has been doing little for months, this is a change for the larger indexes. Obviously the NASDAQ has the same issue.
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