$SPX likely to test the 1800 level

By Lawrence G. McMillan

Wednesday was a very powerful, bullish day.  It mirrored the action of last Friday: S&P futures were trading down sharply before the NYSE open, but once that market opened, it was off to the races on the upside all day long.  Last Friday was a 30-point reversal day from low to high.  Yesterday was a 24-point upside reversal.  Those are huge moves, especially in light of the fact that actual volatility has been so low lately. $SPX, $OEX, and $DJX (the Dow) all closed at new all-time highs. $NDX and its ETF, QQQ, are at new relative highs.  Only the small-cap indices, such as the Russell 2000 ($RUT, IWM) are lagging behind.  The entire 1750-1770 range should be support for $SPX now; that’s where it traded for the last two weeks.  There is strong support at 1730 as well.  Now that the bulls have engineered the breakout, it’s likely that $SPX will test the 1800 level, where ironically the upper “modified Bollinger Band”(mBB)  resides.  The previous mBB sell signal remains in effect, since $SPX has not traded at either the lower or upper Band since... 

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