Higher Highs and Higher Lows:

The Up-Trend For The S&P 500 Is Still Intact.

• Technically, long-term trend line support for the S&P 500 is at approx. 1970-80.
• Although yesterday registered a significant drop on higher than average volume, until enough selling interest enters the market to push it through that level, the up-trend will continue.
• Trading volume is a concern, as the up-days continue to reveal lower than average volume and the down-days have higher than average volume, however there has not been enough price movement or momentum in either direction to take the S&P 500 out of its short-term range:

• Volatility jumped yesterday, but in general has been well below its historic averages and certainly significantly lower than it was earlier in the year:

What comes next?

• We continue to believe that stocks are expensive:

• However until a sustained break-out from the current trading range in (either direction) occurs, the short-term looks like it will be more of the same, range-bound trading.
• If enough buying emerges to make new highs above 2135 and the market is able to sustain those, a move to 2150 will be likely.
• If selling enters the market, there are a number of points where we would expect to see buying support:
• 2090 at the short-term trend-line.
• 2040 at the March lows.
• 1970-1980 at the December lows and the long-term trend-line.
• That would be approx. a 6% correction.
• We are due for a correction, but only time will tell as to when.
• We remain cautious.