1085 is acting as a strong support and I would be looking for a rebound to at least 1113 in the next several days. The game plan is following – we might go to 1105 from here, then a pullback to 1100 area, and the another leg up to 1113 area.

Currencies also support this theory, with the EUR/USD unwilling to go lower and 1.40 acting as a very strong support. Looking for a pullback to 1.43  in this pair.

My only concern here, is that indicators don’t support my theory of a coming rebound – both Stochastic and MACD show no signs of any divergence whatsoever.

Right now, we are in the market, where every small dip is being bought, a lot of positive news coming out, media starts to talk more and more about the “recovery”. So, all in all, the public’s mind is shifting towards “booming economic times ahead”, while some more sophisticated players are quietly selling their assets.

I believe, we will be stuck in a 70-90 point range till the end of the year. This is a good environment for a Wyckoff Top being formed. But it’s only a speculation at this point. Right now, the best way to trade this market is to ride it sideways, by buying support and selling resistance. There are also different strategies to multiply your earnings with options. Check out MarketWatch to find more about it. Click to get your Free 30 Day Trial of MarketWatch’s Proactive Options Trader Newsletter.