Things were rolling along pretty smoothly, with $SPX having made new all-time closing and intraday highs on March 28th. There was a little pullback at the beginning of this week, with a modest deterioration in some of the market internals, but it did not appear to be significant. In fact, by noon on Thursday April 4th, $SPX was well on its way to challenging those highs once again. Then, a Fed Governor (Neel Kashkari) made some hawkish statements and selling swamped the market.
This market continues to show an amazing amount of bullish strength. After having trouble at the 5180 level for about a week, $SPX broke on through after the FOMC meeting and is trading at new all-time highs once again. The 5180 levels is now support. There is further support at 5050, and since $SPX did some "work" in that 5050-5180 area for a few weeks, it is a solid support area throughout as well as the launch pad for this new leg of the rally.
This market just keeps rolling along. It is overbought, but that's probably a good thing rather than a bad thing. As the noted Smith Barney technician, the late Alan Shaw, said "The most bullish thing a market can do is get overbought and stay there." That's what this market is doing.
After gapping sharply higher on the NVDA earnings (February 22nd), $SPX slowed down a little but did not really pull back strongly. In fact, the Index made another new closing high yesterday. There is still a large gap on the chart (circled in Figure 1 on the upper right), from the post-NVDA reaction, and it would probably be a healthy thing if that gap were closed (a move down to 4983 would accomplish that).
