S&P 500 Morning Analysis

Volume picked up on the continuation rally Tuesday as the market finished with a strong gain. The gains came easily in the morning, but there was a sharp midday selloff which put the rally in jeopardy before buyers came back in near the close. The market did find some downtrend line resistance and now the 106 level is the the next upward obstacle before the next prior peaks at 107 and 108. The 105.40 level was tested twice yesterday and that area will be important today (it is trading at 105.36 right now) Failure to hold above 105.40 will likely lead to a test of S2 which is at the important 104 level.