R.Kelly had yesterday’s action pegged with his 1994 hit “Bump and Grind.” The NDX pushed the 2,370 limit and SPX rested on the back side of the intermediate-term trend – both published in yesterday’s MCoJ. With little or nothing to talk about, besides Casey Anthony getting off here in Orlando, we wanted to look at the shorter-term possibilities.
After the 7-day selloff at the beginning of June the SPX built a base just above its 200-DMA for the remainder of the month. This base was, as you remember, quite broad in scope – just about 40 SPX points. Once the topside was taken out (~1,300) we looked for potential “travel” distance. Yesterday we pointed out the backside of the intermediate-term trend, but what we didn’t discuss was how this resistance level directly corresponded to a measured move from the base. With the base being 40 points technicians typically add the depth to the move – hence, 1,340; just where the SPX spent the day.
For now we wait.
As Always, Stay Tuned…