Still Technically Bullish

Friday I mentioned 1265-1270 as strong support. We never got there, but we could today.

Friday was an inside day with low volume, which is technically bullish. So 1265 would give the market a needed breather at the 38% retracement of the move from last Wednesday's 1221.06, the day before the big up thrust.

However, any weakness could morph into more weakness at any time -- Friday's pattern left the market with some interesting options. But unless the S&P quickly heads below 1265 and fails at the 1245-1248 area (61.8% retracement zone) I will continue to look for 1300-1306, but will play it very cautiously. The EU debt deal is precarious at best, and is symbolic of too much lingering hope. When hope is finally displaced by outright FEAR, people can do extreme things.