Minor Excess Bullishness Post Breakout

Following the breakout last month above the 1185-95 level, the market has spent much of the past 6 sessions backing and filling from the spurt up thru resistance.

My partner Kevin Lane of FusionIQ writes: “As seen in the chart below the S&P 500 pulled back to its uptrend line near 1,194 (green line) on Friday. Just underneath this uptrend is secondary minor support in the 1,187 to 1,181 range (red lines). At this point the recent sell-off appears to be correcting an overbought and slightly near term over bullish sentiment trade. Though things may get a bit slippery we aren’t expecting a huge sell off at present. If we were to drop below those aforementioned levels then the next big support level is in the 1,150 area (orange line).

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S&P500 Breakout, with trendlines and support

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Sentiment on QE2 and Breakout has gotten frothy — any pullback towards support and trendline would be healthy:
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AAII Sentiment: back to 2007 Highs

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