As we can see from the chart of the S&P e-mini (ES) futures above, we are running into important resistance in the upper 1060s after having taken out the highs from the past two trading sessions in overnight trade. We're seeing higher oil prices, higher 10-year Treasury yields, higher gold prices, and a much weaker U.S. dollar. In short, the intermarket themes are showing risk appetite and that looks to be supporting stocks. That having been said, we have a Fed announcement tomorrow afternoon, so keep an eye on intraday volumes tailing off, as traders may take bets off the table--keeping markets slow and rangy-- ahead of the event.
Failure to sustain a move above overnight highs would support around 1062 and again around 1057/1058. On any move to new bull highs, I'd be watching closely for confirmations and non-confirmations, to gauge the possibility of a false breakout to the upside. As I mentioned earlier, I believe we've seen a momentum peak for this bull leg last week; we tend to see price peaks on weaker strength and momentum thereafter. So far, the market action is consistent with that expectation.
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