Update: I wrote this post, this morning before the U.S Declared a Flu Emergency. Now futures are down 13points. It's very early but these support levels could be tested early this week.
The market trend is up right now, until this trend is broken the bulls(Goldman Sachs) still have full control of this market. There are more areas of support right now then resistance, so the trend favors the bulls.
The trend does seem to be weakening though.
60 Min key levels:
Bulls= 845-840. A break of this would be a break of the up channel. This would eliminate the current up trend the market is in. The next support is at 830-835.
Bears= 875-880- a move above this and the market easily goes to 900-950. There would be to much support beneath the market. Also for the bears and drop below 850 needs to be defended.
For the daily support and resistance are similar to the hourly chart.
Bulls= 840 again is the same trendline that is on the hourly. The bulls also need to defend the EMA's, as well. These have provided support already and need to again if the market wants to mantain its uptrend.
Bears= 875 and if all else fails 900.
Currently on the hourly the market is way overbought. One thing to note about this "great rally" is that the RSI has not been making new highs with the market. If you look at the RSI when the market first started to rally it would make new highs with the market. A pullback is likely from the hourly chart, but if the channel support holds it could start another move up.
Based on the current support levels, these scenarios could play out. Which I mentioned in this post. I updated the purple one since we did not go down on Friday. I also added the BLACK scenario which is a break above 880.
