All the noise about S&P 500 breaking above 1,300 yesterday may mean little to the market at this point because the important resistance area starts about 1.5% away from these levels, as already explained in a recent post.
The most important resistance area, technically speaking, comes from the down-trendline from the October 12, 2007 high of 1,576.09, as shown on the weekly chart above. The horizontal line that intersects the price axis at 1,348 is defined by the two shoulders of the head and shoulders pattern formed during the first half f 2011. As a result, the resistance area is roughly between 1,328 and 1,371 or it starts about 1.5% away from current levels.
Therefore, the index must clear 1,371 and stay above that level before one can talk about a new leg up. In the short-term, the index must clear 1,348 to then attempt a rise towards 1,371.
This is a bumpy road ahead as I previously wrote.
Disclosure: no relevant positions.