Retest of breakout?
thumb_4.16.10_index_spx_w_--_new_s__p_500_indexThe end of March congestion zone of SPX 1170/1175 should be retested following its breakout in early April. As pointed out last month, it was a key battle in 2002, in 2004, 2005 and 2008. It is almost more relevant than the much touted 1150 level. Friday's high of 1213.92 was not an incidental event brought about by the now much publicized Goldman news. It was an important failure zone in September 2008 (see chart) and weakness had actually started appearing prior to the news release. We also saw an all time high reading in ISE equity call/put of 722 at Thursday's open (7 to 1 calls over puts), a clear sign that complacency had taken a further turn, morphing into outright massive call speculation the likes of which we have only seen at major inflexion points. It could be a tumultuous week, with heavy favorites such as IBM and AAPL scheduled to report against the backdrop of potentially growing negative news and extremely overbought markets. There has not been a better time to join us on the Live Monitor and stay ahead of events.