Market Update - 8/5/2010

The choppy wave action and the side ways movement seems more like a topping process that consolodation to me. However, I still do think that we will get one more high above 1128. The number I am looking for is 1135. But overall, I don't think the SPX can go much higher. 1140 is the max according to what I see.

Despite the price action over the past few days, I don't see a distinct top yet. I would like to see a big open and/or up day reverse down. I think that will be the sign of a top.

The first test is crossing over 1131. This is a very key pivot, and also happens to be our current major high from mid-late June.

Of course, if we happen to have a big bearish day with heavily bearish internals come within the next few trading days, I think it will be safe to call a top. So just be cautious for a sudden swift down move. With the market being so close to a top, it could happen at anytime.

Also, this topping process looks similar to ones we have seen in the past.

As we know, tops are a longer process that bottoms.