The Wedge: Its been a while! The market rallied since its lows at 128 forming an ascending wedge pattern this is typically a bearish pattern.  It is not the cleanest wedge but the tight upwards price action off the lows creates one side of it. In order for the wedge pattern to become bearish it would have to break to the downside and as of now it has not.  In fact there seems to be more room to run on the wedge.

Next Key Levels: SPY has cleared one major resistance level at 134.26 this level was the 70 day ema and the highs for the last week.  This should now act as support and a move below it would be considered bearish for the market as well as a break of the wedge.  SPY’s next resistance level is now at 135.97, which acted as support for the last bounce in April.  Once this level broke the market moved lower so there should be selling pressure if SPY moves back up to this level.

SPY Wedge

The market has just worked off an oversold condition moving to overbought on Friday.  The short-term trend is up and until this trend breaks the bears will not regain control.  The bears have internals on their side and the longer-term trend. Shorting is still risky here with a Fed announcement on Wednesday.  Although sans any Fed QE crap the PI gave an overbought signal on Friday.  Come back for that.

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