Market tested last week's low, and successfully held last week's low, and rebounded off it. Moderated ADP number and optimistic biege book offered initial catalyst yesterday. Quietness in China (market closed for parade) helped today. All thest facts are actually relatively minor, as market was just looking for excuse to rally from a largely liquidity driven selloff last week.
The real test in short term (next few days) is tomorrow's NFP. A moderate number around 200K will be ideal. If we get that number we probably will retest last Friday's high around 2000. After that the March low at 2025.
Coming Monday if China stays stable, we might have a run at 2050 based on symmetry of two up legs (ABCD pattern), and the top of the upper channel. After that we may stall.
Have said all, the rally off last Monday's low is not as strong as last Oct, which was a very unusal V-shaped bottom. The high of the year is probably in, and I would not wait and hold out for 2125-2130, high of the year, to reduce.
Just my 2c. YMMV. YMYC.
