Market Testing Breakout – Watch For This

Last week the market broke out to a new all-time high. It needs to jump off of the prior high.

PRE-OPEN MARKET COMMENTS TUESDAY - From a technical perspective, breakouts to a new high frequently revisit the previous high. Asset Managers are not inclined to chase the breakout, but they will buy near the breakout. From a bullish standpoint, we need to see that "pop" off of SPY $565. That would be a sign that they are interested. If the market just sits at this level it will be a sign that the breakout was not that significant and the move could have been the result of short covering and triple witching. This scenario is not bearish, it's just not bullish. It would also be a sign that the best bulls can hope for is a gradual float higher. The only scenario that would be bearish would be a smack down below SPY $565 on heavy volume with follow through selling the next day.

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