The 05/04/21 post noted that usually after a break of a support level, the prior support then becomes resistance. On 05/05/21 the S&P 500 (SPX) pushed above the prior battle line support, hinting continuing bullish action. On 05/07/21 the bulls pushed the SPX to a new all-time high.
The daily SPX chart courtesy of Trading View illustrates a Stochastic bullish crossover.
The Dow Jones Industrial Average also made a new all-time high. Two of the three main US stock indices making new highs is an additional bullish factor.
It appears the rally could continue for at least a few trading days, assuming the bulls can exceed the SPX high of 4238.04. If on 05/10/21 the bulls can’t push over 4238.04 watch SPX 4167.76. A break below that short-term support made at 11:44 AM – ET 05/07/21 could have huge implications for market direction.
If on 05/10/21 the SPX can’t move above 4238.04 and breaches 4167.76 support, the 05/10/21 blog will illustrate an updated SPX Elliott wave count.
Traders were stopped out of half of a 100% SPX short position on the move above 4218.79. The short position was initiated 05/04/21 at SPX 4170.87. The percentage move was 1.1% the loss on half the position was 0.55%. Continue holding 50% short with a stop loss on an SPX move above 4240.00.