The S&P 500 initially rallied on Monday but gave back gains as soon as we got to the 50-day EMA. The 3950 level is an area where we have seen sellers previously, so it does make sense that we continue to see a lot of resistance in that area, and as you can see on the chart, I have a couple of levels marked that I believe are going to be important. Because of this, it’s more likely than not going to be a situation where we are looking at the potential for more of a back-and-forth type of situation.

On the other hand, if we were to break above the 3950 level, then we could threaten the 4000 level. Breaking above the 4000 level then opens up the possibility of a move to the 4200 level. Anything above the 4200 level would be a massive change in attitude and trend, but I just don’t see that happening unless the Federal Reserve does something to give the market hope of a loosening monetary policy stance. That being said, the market will continue to be very noisy and jittery, so you will have to be cautious with your position size.