Shaking Ain't Over

The current juncture is very important. Yesterday the market was able to overcome very weak internals to close at another rally high. In doing so, it opened the door to new highs (above 1474.51) and even new all-time highs. But before it gets there it may still have a few tricks left.

Notice the current rally began from the 61.8% Fibonacci level back in November. Yesterday it closed very close to the 78.6% retracement of the decline from the 1474.51 high. Should this deep retracement personality be repeated, the S&P could find a reason to test the 61.8% level of the current rally which could take it to Target #1 at 1383.33. Target #2 could revisit the November lows at 1343.35. It should be noted that target #1 is actually a zone and that price could hit a few different Fibonacci relationships there (tried to keep the chart as clean as I could for illustration purposes).

There are many other potentials as well. The current rally could be forming an ending diagonal in which price could pull back to the 1430-1435 area before resuming higher. And speaking of higher, there is a volume and price cluster from 1457.34 to 1460 that may want to be tested.

Bottomline is that the market is likely hinting that new highs are indeed on the way. It is how we get there that matters, and how many people it shakes out before we get there. In my opinion, the shaking isn't over.