Yesterday's rally was impressive. Breadth was excellent, small caps slightly outperformed, DJT rose almost 2%, outperforming other indices, and number of new 52 week lows dropped significantly. This morning futures are nicely higher and for now it looks like that SPX is going to take out resistance at 1600.
There are two very probable scenarios from here going forward:
- A - 70%: Indices rally, back test and take out all resistance along the way to challenge mid May all time highs. That would require fantastic earnings reports and forecasts.
- B - 30%: Indices rally to back test 50/20 D-SMA's and primary trend lines (brown circle, SPX 1620 - 1630) then sells off hard to test recent lows as earnings reports disappoint.
Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation. Furthermore, the opinions expressed may change without notice.