From one expected price level to the next – that’s how short-term trading works.

Right now, we face the next key level to watch – overhead resistance – at 1,100 and so we play another round of “will it break or will it hold.”

Here’s  a quick update:

The 1,100 level is ’round number’ resistance which also forms a confluence with the rising 200 day simple moving average.

A break above this level puts the balance back in the bullish camp, and makes this brief time under the average a mean whipsaw for the bears.

Of course, as I mentioned earlier, any solid break under 1,040 officially reverses the trend from up to down… definitionally speaking, we are still technically in an uptrend while we’re above 1,040.

A quick look at pre-end of day market internals – Breadth and Volume Difference – show bullish potential:

The 5-min S&P 50 Chart above shows the consolidation range between 1,070 and 1,090 which has developed over the last few days.

Breadth formed a new chart high yesterday in the morning session, which has continued into today’s session – that’s a bullish sign.

VOLD – volume difference of advancers and decliners – also broke out yesterday, but did not form a new chart high.  That distinction was made on the May 21st rally.  Not super-bullish, but a good sign that VOLD is registering positive 1 million shares right now.

So a break above 1,100 sends the upper target to 1,120 at a minimum and then a possible short-term target back to 1,150.

On the other side of the “If/Then” assumption, a failure for bulls to overcome 1,100 would likely send us back down to test 1,050, but from the looks of internals, the bulls have a good shot of breaking above 1,100.

Let’s see if they do.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade