You readers don't need to tell me that stocks had another great run up today with a strong finish. So, let's go straight to where we ended, so we can try and come up with a strategy for tomorrow.
First, the S&P. I have been going on emphasizing the importance of 1115 on the S&P for the last two weeks now. In fact, I recently wrote a post titled - The importance of 1115. I won't go into the importance of this level again so as not to bore the regular readers of this blog, so if the newer readers would be kind enough to just click on the above link if they wanna know why this level is so important. Well, dear readers, we ended today at 1115.01. Need I say more on how interesting and important that makes tomorrow's action.
If you think the above is interesting, and you should, check out the updated version of the NASDAQ weekly chart from what I posted yesterday. Will the dreaded 2325 level strike again?
This really sets up things for tomorrow. But I am a seller here, and not a buyer. Well, I haven't checked the numbers and shall post about them later tonight, but the markets are wayyyyy overbought here. If you are bullish, what you should be hoping for here is a period of consolidation in the form of a pullback at lower volume for the market to work their way down from these overbought conditions. The second alternative for the market to come down from these overbought conditions would be a sharp spike down, which of course, doesn't sound that appealing, does it?
So, in a nutshell, the strategy for tomorrow should be to start taking profits if you haven't done so already and wait for a pullback. I wouldn't go shorting here until I see the volume and strength of the down move.
Take care and good luck!