Reviewing the SPX 5 minute futures chart (Tuesday PM), we see a pennant or wedge forming. Will it break up or down? An upward channel may also be in play. We should find out which way it goes in the next trading day or two. The market is in an uptrend, and with the holiday approaching, volume should diminish which favors upside. Institution block traders today were buying large cap, EFA and SPY among other things, but at lackluster rates. The US dollar is still declining in a downtrend vs. the Euro which favors a bullish resolution. Bonds are overbought and could reverse anytime, which portends a bullish bias. SPX cash has chart resistance at 1413, 1418, 1426 and then clear sailing to the 1440 area. I can’t even speculate what effect Ben Bernanke’s speech on Friday at Jackson Hole, Wyoming will have on market direction. Most financial commentators believe that he will maintain a poker face, saving the easing policies for later.
