By Lawrence G. McMillan

When $SPX broke out above 2740 two weeks ago and then followed that with a breakout over 2790, it seemed that further gains were certain. However, the market has stalled just above the 2800 level. Perhaps it's just regrouping, for most of our indicators are remaining positive, but it's hardly a resounding victory for the bulls (yet).

The upward channel is marked with blue lines on the $SPX chart in Figure 1. The next target would be the top of that channel, which is at 2850 and rising.

By Lawrence G. McMillan

The low-volume rally of last Friday (July 6th), finishing up the holiday week, was a breakout over resistance at 2740. That has spurred a strong, quick move to the next resistance level at 2800. $SPX is now bumping up against the March intraday highs, and it has closed at its highest price since January.

By Lawrence G. McMillan

$SPX has broken out over resistnace at 2740. This gets it out of the 2700-2740 trading range that is been in for several weeks. The 2700 level has been support and/or resistance for over three months now, acting as a sort of weird magnet for the market.

By Lawrence G. McMillan

Last Monday (June 25th) $SPX gapped down below support at 2740, and a rout was on. Within a few hours, $SPX had fallen all the way to the next support level at 2700. The rest of this week has been spent testing that 2700 level, and it has held for the most part. But the breakdown adds a modicum of bearishness to the $SPX chart. There is now resistance at 2740; there is another gap at 2750, and the 20-day moving average is at 2755.

By Lawrence G. McMillan

Stocks have had trouble advancing since June 11th, which is when the strong rally that began on May 29th petered out. This week, especially, has seen a pullback that reached the rising 20-day moving average and also tested support just above 2740. So far, this is nothing more than a simple correction, and the indicators have remained bullish for the most part.

By Lawrence G. McMillan

The most positive thing one can say about the $SPX chart is that the major downtrend lines have been broken, and the gap at 2750 has been filled. Beyond that, the bulls have had to be satisfied with small gains but a failure to penetrate through the resistance at the March highs of 2800. A close above 2800 would be constructive for $SPX, and that should lead to an attempt to make new highs above 2870.

By Lawrence G. McMillan

The island reversal gap on the $SPX chart was finally filled, at 2750, this past week. That moves the $SPX chart out of "bearish" status, but it is still badly lagging indices that have recently made new all-time highs, such as the NASDAQ Composite and the Russell 2000. Even so, this is a big improvement, for all of the other indicators have retained their bullish status as well.

By Lawrence G. McMillan

Stocks just can't seem to get out of their own way. Both bulls and bears have failed to capitalize on what seemingly should have been opportunities. The bottom line is that the $SPX chart is stuck in a sideways trading range until proven otherwise, with resistance at 2750 and support at 2640.

By Lawrence G. McMillan

The Standard & Poors 500 Index ($SPX) is now trapped in a very narrow range, between 2700 and 2740. A breakout above 2750 would be very positive, while a break DOWN below 2630 would be very negative. For most of the rest of the indicators, everything is bullish. But as subscribers know, $SPX is the most important indicator.

For example, the put-call ratios are solidly on buy signals as they continue to fall almost daily.

By Lawrence G. McMillan

The market continues to act much better than it did in February through April. That positive intraday reversal on Thursday, May 3rd, still stands as the day that things changed. $SPX has been up most days since then, with only one large down day -- May 15th.

Having said that, the one indicator that is still not in synch on the bullish side is the $SPX chart itself. There is a problem in the 2750 area. Until $SPX closes above there, the chart will continue to have a bearish tint to it.