The MONTHLY SPX had its first close above the 5 year lower Bollinger Band in 7 months. The market gains for the months of March and April are being misread by many other players and being seen a bear market rally which they suggest is now over because of the large percentage gains. In my opinion, the price action moving the SPX back to the lower Bollinger Band was just correcting a panic overshoot on the downside. This moved prices up to the undervalued zone at the lower BB which has been a good buying point in the past. The month of May saw continuation of the rally along with a corrective sideways pause which should now be resolved to the upside.
On the daily chart I've marked the 928 zone, which is the location of the declining 200 day moving average and the upper 20 day Bollinger band, as a point of resistance --- This seems like a logical point for the index to pause but given the recent pauuse in the MCO, along with the sideways correction over the last two weeks, I believe the SPX is poised to punch through the 200 day average, turning up the Bollinger bands, and then punch through SPX 1000 before we see a more substantial 10% to 12% correction
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