On the 30-minute chart, price action is like a pinball bouncing off the noisy bumpers (support and resistance). The bulls are perking up as SPY managed to hold above the prior low and reverse near the 62% retracement mark. This retracement was featured in the Friday morning commentary. Even after Thursday's gap down, I still considered the glass half-full for the bulls. Now that SPY is challenging resistance, the bulls still have the definitive edge, but the glass is half empty because the short-term risk-reward ratio is not good for new longs. In fact, the current risk-reward ratio favors short positions. However, I do not consider bearish positions an option when both the short-term and medium-term trends are up and seasonality is bullish.
"6 Weeks and 7 Gaps" sounds like the title for a movie with Harrison Ford. SPY moved back to the top of its trading range with a gap up on Monday. Needless to say, there is no change in the medium-term trend (up). With yesterday's close at 111.33, SPY finished at its highest closing level of the year. Even though there may be debates raging on valuations, the economy and the need for a correction, there is no debate on the current uptrend. New highs occur in uptrends, not in downtrends. I am now setting only one support zone around 107-108. This level has held since mid November and a close below 107 would warrant a reassessment of the medium-term uptrend.