Where the Market is Heading

I think that with volume returning we could see a leg down from here. Many traders were on vacation until the "real" start of the new year, and there has been talk that a lack of supply has caused the market to rally. I wouldn't be suprised to see us go down and test the $85.50 level on the SPY. If we do get a follow through on the break through resistance we made last friday, I would look for a pullback to around $92 on the SPY before getting in on the long side. Any long positions I hold however are going to be very short term. The main thing to focus on is that we are still in a primary downtrend The market is below a downward sloping 150 day moving average and still has many resistance levels in front of it. The Chart below is of the SPY on an hourly timeframe. I have drawn possible support and resistance levels going forward.


SPY Hourly

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