Last week's market reacted as planned. We held the S&P500 680 support level on Monday and shot up from there throughout the week. This 750 - 800 level as discussed before could form a trading range for the next few days. However, note that both the S&P index and Goldman Sachs (GS) are testing the downtrend resistance at 800 and 100 respectively. GS in particular failed to reach 100 again on declining daily volume. This is a pretty bad sign. (JPM, C, and BAC looks similar to GS, in that they are showing a short term double top)
If we fail to keep this momentum going up, I see a pullback to 720 to be very possible. And if we're to fail to keep the 720 support, 670 would be next, and then 600 as I suggested in last week's review.
[caption id="attachment_1099" align="aligncenter" width="500" caption="S&P 500"][/caption]
[caption id="attachment_1100" align="aligncenter" width="500" caption="Goldman Sachs"][/caption]
As a reminder, the reason I'm using GS in particular as a leading indicator is because we're, obviously, in a financial crisis, so like a house of cards, the [market is only as strong as the weakest link in these troubled times].
[market is only as strong as the weakest link in these troubled times]: http://www.quantisan.com/a-sign-this-financial-bloodbath-is-ending-soon/