In my post last week I explained why I was still Bearish (short-term) and was anticipating a Pull Back in the Market (S&P); yet we went higher. Oh well. However, I did say that I could be proved wrong if the Unemployment Rate report came in better than expected; it did and I was proved wrong (at least temporarily). Let’s examine why I am still looking for a retracement. Volume is continuing to dry up and we recently made a new Trading Point at 1122.25 (March Contract) or 1117.25 (June Contract) which should be HIT on the next move down. As I see it, the Market could still head a bit higher to 1154.75 to 1155.00 before heading down. If the 1155.00 level proves to be the ceiling of this latest move up; then the Trading Levels I have updated below should be the areas of support.

Now for the good news, the RSI (Relative Strength Indicator) continues to improve and is showing very good strength. The pattern the Market is forming (looks like it could be a cup-and-handle pattern) is a very strong one. Therefore, the next thing to watch out for (after a retracement to form the handle of the cup-and-handle pattern) is a close above Thursday’s close (1146.25 – June Contract) with significant volume; thus signaling the beginning of the next move up. When and if this happens (it should) I will give my upside projections. These projections would be to levels not seen for quite some time.

Here are my updated Trading Levels
March/June Contract
1155.00/1150.50
1128.00/1123.50
1111.25/1106.75 (Important Level)
1097.50/1093.00 (Important Level)
1084.00/1079.50 (Important Level)
1067.25/1062.75 down to 1056.00/1051.25

And here are my updated Trading Points which may be HIT (updated):
1143.00 HIT
1122.25/1117.25 (updated with June Contract)
1114.50/1109.75 (updated with June Contract)
1105.25/1100.50 (updated with June Contract)
1056.00 We came within .25 of Hitting this Trading Point – however I still say we need to Hit it.

Click on image to enlarge!

Have a Profitable Day Trading!

For more from the Market Trading Guru, you can follow his blog at http://mrkttradingguru.wordpress.com to receive the daily Trading Levels or on Twitter: @MrktTradingGuru.