Well, got the rally up I was looking for but it was more powerful then I expected. It did push through the falling red trendline and back-tested it after-hours yesterday. This morning it's back up to about flat and there's strong resistance overhead from the triple top 2740 area. But... the old saying is "there is no triple tops", which we know there is but the saying was meant to imply that when the market hits a level enough times it will break it. The "saying" suggests that by the 3rd hit it will go through but that's not always true of course. Things have changed over the past 8-10 years as computer algo's make up 84% (a stat from 2015) of all trading. Old sayings just don't work anymore. We don't have just one monthly option expiration now but have them 3 days a week instead.
Trading the market based on old facts, sayings, and historical data just isn't smart these days due to all the changes that have happened. But I will say that each time a level is hit (support or resistance) the fact that remains the same is that the level will get weaker. Whether it breaks on the 3rd, 4th, 5th, or 6th hit is unknown. I don't think it has the strength today to break it as the bulls ran all the stops on the bears yesterday. Today should be a consolidation day where the bulls just drift sideways mostly with very little up or down movement. Then tomorrow is when we should see it breakthrough (if it's going to happen?).
Now, if you are bear then you want the market to close slightly up today and then rip higher tomorrow to take out 2740 and close the 2755 gap. That will step up the market for a nasty drop next week. If you are a bull then you want the market to back off some today and close down. The ideal level would be to drop into the 2710 area and back-test the falling red trendline. That would be enough to reset the overbought short term charts again to allow the bulls to rip higher Friday and take out the triple top. It would also (most likely, no guarantee) allow the bulls to hold above the 2740 into Monday, maybe Tuesday.
I'm still 50/50 on whether that will be enough of a down move to allow the bulls to keep rallying after that and take out the all time high? I'm really doubting it but if they were to chop sideways above the 2740 all week they would certainly have allowed enough time to past to work off any overbought charts, which would then give them better odds the following week at taking out the all time high. It's kinda about "time" and "price" as the bears really need to get the bulls to push it up fast to exhaust them, thereby forcing the bulls to let the bears take control next week.
It's a staring game really. The bulls group together and run for a bit and then stop to rest holding their ground and staring at the bears waiting outside the fence for them to get tired. As long as the bulls make fast runs and then rest (trade sideways in a range-bound area) they can make another run later. But if they run too fast, too soon they will get exhausted and the bears will seize the moment and attack hard.
Bulls should rest today and let the market drop to retest that falling red trendline and then run again tomorrow. But if they retest the line early today and run back up later into the close they will defeat the purpose of "resting" and therefore be vulnerable to a bear attack come next Monday on another run up on Friday. That's the way I see the market today and into early next week. Let's see who's the smarts... the bulls on the bears.
