While we’ve seen quite the rally over the last couple of sessions, the index markets still show a great deal of resistance nearby. Here’s a daily S&P cash index chart:

Click on image to enlarge!

The strongest nearby price factors are the .618 retracement from the August high to low, which lands at 1093.75, and particularly the .786 resistance of the same swing which comes in just under 1109.

The horizontal lines towards the bottom of the price section of the chart represent bar counts. The black lines connect 2 prior pivots and project the number of bars between those pivots forward in time from the last pivot selected using specific Fibonacci ratios. The blue lines connect prior lows to highs and project the bar count ratios forward from the start of the current rally. We look for another pivot high to be established when several of these ratios line up from different swings.

The strongest confluences on the chart are noted in the text to the left. The first one comes up for this coming Monday and Tuesday. Since Monday is a holiday, we’ll need to consider that the focus is from tomorrow, Friday September 3rd, through Tuesday September 7th. If we should continue to rally through that period instead of starting to drop, look for strong price action to continue upwards with the next price and time test coming at the start of the following week. We’ll determine whether or not price and time resistance is holding by looking to our intraday charts to see if support holds on pullbacks or not!

For more from Mark including his “Chart of the Day”, visit MJBraun.net.