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The S&P500 had another bullish session on Thursday, but failed to gain anything that would be considered impressive. However, we must put this into the context of the 1,400 level. This area should continue to be resistive, as it is both a psychological level as well as the top of a channel that the markets have been climbing since the start of June.
The market certainly looks strong, but a pullback seems to be imminent. The fall should only be to the bottom of the channel, so we aren’t looking for some kind of meltdown, rather a pullback to continue the buying. The one thing that could derail the rally is the Federal Reserve of course, as it appears that the market is anticipating more monetary easing by the central bank. If they don’t get it – we could see a serious move lower.