As we noted in last weekend's report, "Our indicators continue to suggest that the path of least resistance is higher and we will hold longs until they suggest otherwise."
The path of least resistance, indeed, was higher and the market finished off a very strong week near the highs.
Looking ahead to this week, options data is bullish on review today. Internals are bullish as well. Price action is short-term bullish, medium-term bullish and long-term bullish.
On price, we are testing some resistance areas here between 4540 and 4560 on the Emini S&P 500 (ES). It makes sense for us to have some sort of pause to refresh for a few days before we can challenge ATHs again. We are still long, but we reduced some size near the highs last week. Now we wait for a pullback to either 4470/80 or 4450/40 support areas to play out, and if this happens we can add back some size to trading longs again.
In my view, any pullbacks -- if we get them -- are buyable at this point. I think we will need to hit 4600+ before any kind of bigger top is a possibility. For now, path of least resistance is still higher, but market looks like it may have a pause to refresh very soon before continuing back higher.
Grey zone resistance at 4541-50 and then at 4562-71. Support is at 4503-16, 4481-71, 4448-37, 4421-09, 4388-78, 4352-42 and then at 4322-13.
For Monday, daily pivot is at 4532. Resistance R1 is at 4549 and R2 at 4568. Support S1 is at 4512.5 and S2 at 4496.
All the best to your trading week ahead.