S&P 1940

There is a lot of psychological resistance at S&P 1940, which was the top for a couple of big bounces.  You got really close overnight with the Eurostoxx screaming higher on a weaker euro and Just get me in buying,  That looks like a buying climax for Europe today.  I would be surprised to see it above today's highs for the rest of the month.

That doesn't mean the S&P has also topped out, because it has proven itself to be much stronger than all the other indices.  I expect a pullback early next week due to post opex hangover effects.  But at first pullback off such a powerful buying thrust should be bought.  Perhaps that pullback goes towards the  1890-1900 zone.  Yeah, not that great a buying opportunity or potential reward, which is why I will likely play smaller buying dips.

Barring an unforeseen collapse in equities post opex, I expect there to be a choppy grind higher towards 1980 by March.  In March, you will get Draghi talking more QE and neg rates and Yellen giving the bulls what they want to hear by delaying and/or taking rate hikes off the table.

The big clue is the extremely strong buying this week off a capitulative bottom last week.  The usual blueprint for such action is a grind higher for 4 to 8 weeks.  The tricky part is not now, but in the middle of March, after the rally has matured and the number of bulls increase, putting the market more in balance from a sentiment perspective.  At that point, we can either immediately collapse back down to break 1800 or grind it higher for a few more weeks to marginal higher highs, like May 2001 and May 2008.  I am leaning towards the latter, but will have to see how stocks trade over the coming weeks.