Possible attempt at all time high likely.
1540 is key level for bulls to defend.
I have not been able to trade much of last week due to my other business commitments but as I can see, markets have been range bound progressively grinding higher. My chart still had 1552 - 1542 marked and I see we are still trading around there.
A few things stand out. Markets have made a new high after another new highs and grinding higher. All attempts by sellers fizzle out within 1 - 2 hours of trading and then the grind upward starts. Even bad news like Cyprus have no impact on the tone of the market and markets are making smart recovery. But I feel a lot of protection buying is going on at these levels and it is visible from the action in VIX. I am also buying protection 2 - 3 years out at 1000-800 level. A cheap insurance sort of for a calamity event.
Since I am re-started looking at day session range, I am easing myself into the trade. Today I would expect to find support at 1547-44 area building a move up to 1556-58 area or possibly making another high at 1560 or above. The line in sand for bulls it at 1540 which if breached can trigger a move down.
My hypothetical stock portfolio is flat as of now with short balancing longs and has done good so far since I started maintaining it. I am looking at a pair trade to Short GOOG long AAPL in equal dollar amount.
The trend is still bullish and calling tops is futile. However please have a look at this post from longer term perspective which is keeping me cautious at these levels. The flip flop market action is also signalling a caution.
