Well, SPY took out Wall One resistance last Thursday and is now facing Wall Two resistance. Take a look at the SPY daily chart below:
It seems to me that Wall Two may either be a walk in the park or present a much stronger resistance for the SPY to break through. On both Thursday and Friday last week, price actions were butting head to head against Wall Two resistance and were unable to break through. Perhaps a rest over the weekend will accumulate enough bull power to simply walk right through the Wall Two resistance.
The good news is that price action last Thursday took out the high of the consolidation range which also happened to be the Wall One resistance. Once price action walks pass the Wall Two resistance, Wall Three becomes the next hurdle for SPY to crack.
Wall Three may be a much harder wall to break out since it has to take out a four year high of SPY; however, if there is enough momentum to break through Wall Three, the next major resistance is the high of March 2000 which is $154.94.
I’ve a feeling that we will have a kick ass earning week starting Monday. Just my two cents anyway.