Trading the Line

An interesting recovery from off the lows yesterday, indicating that the bulls are still wanting to buy the dips.
Can we grind on higher to make the projected peak at 2000?

The oscillator sell signal suggests that the upside is now limited to 1985 or perhaps a stretch to 2000 which may be the surprise for next week?

Expect toppy and choppy though August.

Yesterday's Fed induced rally looks like it wasn't enough to prevent the oscillator declining and will most probably create a sell signal today – unless we get a rally of +10 points or so. Unlikely at the moment due to the negative futures (-6), but not out of the question.

An oscillator sell signal isn't necessarily a short signal but does imply that any rallies will not have legs and that it is relatively safe to sell credit spreads above the recent highs.

A move below 1954 sets up a short signal.

Short term stop hit at 1968, and closed below, indicating the possibility of a deeper correction.

It looks like we did have a momentum peak on July 3.
Note that momentum peaks are often 65-66 days apart and a re-test will sometimes follow to set up a steeper decline.
If we recover from here I would expect to see a re-test of 1985, perhaps even a strike at 2000 towards the end of next week for July expiration.
Otherwise a decline to 1940 may be on.

Lots of rising support lines in the 1950 area, so benefit of doubt still on.

Indecision (Doji day) and oscillator v close to a sell signal. It should fire today unless we get a 15 point move upwards. (Initially this should be treated as a hedge signal rather than a sell signal)
The oscilalltor sell signal suggest a weakening of the market, perhaps a consolidation at the highs, and maybe a impending pullback (requires confirmation by price dropping below the mid-line).

The market is still bullish, and should be treated as such until proven otherwise. If we get the signal today I will sell credit spreads in the 1980-2000 range – as I'm still expecting to see a grind upwards but continued resistance at R2.