The S&P 500 Index could make an initial peak at 4100-4110.
Time-wise, this should occur Friday/Monday before a price consolidation sets in.
The key risk level to watch for any pullback on the S&P 500 futures is 3983; this level marked the high of the first move up off the March 26 low. Holding ABOVE 3983 in Futures and 398 on the S&P 500 ETF (SPY) keeps the up-trend intact and can lead to yet another rally attempt.
UNDER 3983 is bearish and suggests the possibility of a test of late March lows at 3843 and below that is 3720.
Each of these price levels takes on huge importance in the weeks ahead. Initially, any consolidation is expected to prove short-lived and merely alleviate overbought conditions and would fit in with an Elliott-style “ABC” type fourth-wave pullback before a final push up. (But watching these levels and where things could go wrong.. is important). The drying up in price action and volume (despite being a post holiday week) is indeed something to pay attention to, but as always, until price turns down, it’s going to be proper to still lean long and expect 4100 is hit before much of an about-face.
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Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
