If you are interested in seeing a price level in which “the market” as judged by the S&P 500 Index (or SPY ETF) should stall out, at least temporarily, look no further. The $280-281 price level should serve as resistance in the near term:



  1. Taking into account one year of price history, this level marks the Value Area High. Price above moves into the 2nd standard deviation from the volume point of control currently at $272.
  2. That Value Area High coincides with the 78.6% retracement of the decline from the highs last fall to the lows at the end of the year. More resistance.
  3. You can see that price also made 3 short term tops at this same level in Q4 and was unable to hold.


Do I think that the market ultimately recaptures the highs? Tough call but I lean toward yes. Do I think that happens without a battle in and around these current levels? No I don’t. I think price will stall here and will need some time to regroup before making another run higher.

It is playing out as we speak. It’s not magic, it’s just math.

Back with more soon.

Trent J. Smalley, CMT