The S&P 500 cash index (SPX) closed at 1517.93 on Friday, up 4.76 points for a net weekly gain about 0.3%. The S&P 500 extended for new highs last week and is up at least 2% through the first 6 weeks of the year.
This week is major Feb. month option expiration week. 1525 will be the option game battle line. Bulls will fight for that line and higher, and bears will fight for 1510-1500 range.
SP500 is not too far from its major resistance level 1551. As long as SPX holds above 1500 level this week, the upside target 1551 remains intact.
The SPX it is very clearly headed toward that 1550 destination. Every dip in rhe past 6 week was filled by buyers. The momentum average lines keep chasing the price, which not only encourages existing buyers to let their profits run, it also brings new buyers into the market willing to accept high risk in hopes of higher prices.
The long-term outlook for an upside target at 1590-1600 is not changed. But for the short term the 1519.50-1530 range still acts as resistance this week.
Monthly resistance 1585 and support 1440; Weekly resistance 1550 and support 1495
Outlook for e-mini futures (ES)
ESH3 Daily Chart
The market has used every pullback to trap shorts and later squeeze them to make new highs. Even though the volume was light on Friday, the goal was achieved.
ES has a short-term overbought condition. Because the seasonal bias is favorable investors and aggressive funds remain on the buying side and continue pushing the price higher.
But the short-term overbought condition, and a new divergence signal on the MACD, serve as reminders that a small quick correction is due; a pullback to around 1490-85 is still possible.
Our HFT favors buying side this week. Our selling number for this week is 1518.00 and 1526.50. The buying numbers are 1505.50 1498.25 and 1491.00
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