"Pull out the SP-500 week chart going back to 2007. You can see just how important this 1100 area is to the bull case. The 50-day SMA is at 1099 and rising. The SP-500 closed above it last week and needs to do the same this week to main momentum to the upside. The weekly RSI has strengthen to get back above 50 and the Full STO is showing a leading indicator bull cross after bottoming at the oversold level of 2. Finally the weekly MACD is nearing a bull cross and the zero line. If the SP-500 can hold above the 50-week SMA of 1099, then there is good shot at continuing this rally at least up to the 200-week SMA of 1211. However, if the SP-500 sells off below 1089 into the end of the week on bad Q2 GPD data, then the current rally is in jeopardy. If the later happens, then this current rally to 1121 will likely only be an X-wave of a larger double Zig-Zig for P2 (i.e. ABC-X-ABC). The second Zig-Zig will target the 960 area into October for the a 50% retrace of P1. The first Zig-Zaf was 209 points down from 1220, so the second ZZ could be 0.62 to 0.78 times the first (or a range of 959 to 991).
Thus the next few days to a week is a very critical time in the markets. We have to watch for a decisive break above 1120 to confirm the current rally will extend toward 1200 or a break below 1089 to confirm another leg lower has become much more likely."