The Bulls just can't hold

Everybody is closely watching the 950 level on the S&P 500 for a breakout and confirmation that this rally still has room to grow. I thought we had that today as price consolidated for a couple of hours before breaking through toward the upside. I think the first green arrow was the best trade of the day as price broke though a narrowing consolidation (yellow lines) that formed a nearly perfect wedge.

I took a small position there because I was worried about the overhead resistance of yesterday's high (blue dotted line on top chart). Price couldn't break through in the morning hours, and I wasn't sure if there were enough buyers to push it through at 12:30. There were, and notice how that line became support.

I took a larger position at the second green arrow and held on as we were off to the races--quickly passing the 950 mark. I honestly thought that we were going to see huge buying pressure all the way into the close. But a significant divergence on the MACD at the highs of the day concerned me. After that first bearish candle, I exited.

I still expected prices to climb higher expecting the euphoria of breaking 950 to create additional buying nuttiness. It didn't happen and we bounced several times off of the support line before slicing through after 3 pm. Price tested that resistance line a few more times before heading down towards the 200 period moving average.

So once again we stay put in a trading range that has lasted about a week now. It will be interesting to see who wins this battle. Just make sure you're on the right side of it when it happens. It could get pretty ugly if you're not.