Drew Arnold's  Instablog

As predicted yesterday, we hit resistance today at 875!  This is where things will get interesting.  The market has been on a relentless tear over the passed month, so a pullback off of this resistance is likely.  The questions is, if we see a pullback then how far down will we go?  Those who have argued that this is a bear market rally might expect us to return to the lows of early March.  However, I would suggest that investor confidence and comfort has risen dramatically since then, and at the worst we will trade sideways with 875 as the top of the channel.  Here's the reasoning:

 Once again, the VIX saw a huge drop today.  Investors are increasingly less concerned about the market falling out from under them.  This means that we'll see less panic selling and more buying on dips, as we've seen throughout this rally.  Therefore, if we see a pullback off of 875, don't expect investors to sell in a panic.