So with the "crap test" coming out Never(I've been out of the loop for a while I guess we don't know when the stress test are coming out), it will be important to watch some levels on XLF.
First is the resistance at 11.20. A break above this and everyone will be buying XLF like it was going out of style. Also watch the two trendlines, if these break it could start some selling, also the 20 EMA has been support as well throughout this rally. All eyes should be on Financials this week, especially Monday. Financials will lead this market.
SPX on a daily chart has much more support beneath it, then resistance. So this favors the bulls. The next resistance levels at 878-888. A break above these levels and the market should run up to the 900-925 or possibly the 200EMA. But a break of the uptrend would be very significant for the bears.
Looking at the weekly chart, the market is overbought but has not produced a clear sell signal. There is resistance above for the market. Also look at how the market reacted the last few times the market was overbought on a weekly level.
So if the market does break out, we could see a run to 900+. This would put the market on the weekly chart very overbought and on a daily chart as well. With the stress test results coming out (sometime soon), these results could very easily move the market to 900. It is also important to watch if any support levels such as the lower trendline or the 850 support are broken this week.
