Another trader and talented technician, Nicolas Chéron tweeted a chart of the SPX earlier today, which prompted me to look at the major Fib extensions of the market. What you will notice is that we have extended to (within 4 points) of the highs (2007 pre financial crisis) to the lows (2009 post financial crisis). In addition to this move higher the last year, the Relative Strength Index (RSI) is also diverging lower, which suggests the last year move the strength of the move is somewhat waning. Also note, in Nicolas’s chart, he is using the MACD which is looking to roll over too. See below:

I’d like to think the market is waiting for a positive outcome (can kicking exhibition) of the Greek crisis, which could take the market to new highs. With the 161% extension just above the highs by a few points, I wouldn’t be surprised with a small false breakout first, before some profit taking kicks in.

Blake Morrow

Chief Currency Strategist, Wizetrade

Disclaimer: I have no position in the SPX and do not plan on it within the coming sessions.