The above useful chart from Big Charts shows how volume has been distributed at price (left bars) for SPY over the past ten days. We can see the accumulation of volume around the 109 price, with volume tailing off above and below, consistent with a range market. On the heels of the favorable response to MSFT earnings news, as well as strength overnight in Europe and Asia, I will be watching to see if we can challenge the highs of the trading range. If not, I would expect a rotation back into the range, with that 109 area a likely near-term target.
Interestingly, that 109 area also represents Thursday's pivot price, as noted in the Twitter posting this morning. We have already taken out the R1 level in premarket trading for SPY; if we cannot sustain the R1 level, I would look for a move back to pivot. Should we sustain R1, the R3 level would also represent the highs of the the multiday trading range and would be a target to watch for. Thus far, I'm not seeing a great deal of buying or selling support for stocks from the currency markets, which could keep us range bound. I will update via Twitter to gauge intraday sentiment (follow tweets here).
.