The SPX is bumping up against 1400 which is a good place to pause and catch its breath. Our Twitter support and resistance levels (all the red dots) put 1400 as a target with some influence. It has been mentioned repeatedly on Twitter so it’s a logical place for people to take profits or adjust their portfolio allocations. If this uptrend is to continue then a consolidation at or near 1400 for several days would be healthy.
One indication that we’ll stall at these levels is our Twitter Sentiment Indicator (top panel). It fell sharply today even as the market broke even. Previous occasions of sentiment weakness when SPX was making new short term highs has brought 3 to 5 days of selling. If sentiment improves while the market consolidates we should see a continuation of the up trend.
Once 1400 is cleared convincingly then 1422 will be the next logical level to consolidate. However, not too many people are talking about that level anymore. It was mentioned much more frequently in early June. Now market participants are considering 1500 as a upside target. Of course we still have the bears talking about the June lows at 1266 and even a few talking about 1200. The nature of the next wave of selling should give us a direction.