(Disclosure: Bellaire Capital Management was long SPY on behalf of its clients at the time this was written)
The market may be getting a little ahead of itself and a little caution is in order. I think it is too early for a retest of the recent highs and would expect a retest of the 200 day moving average at least one more time. I think we are probably range bound until the elections are over in November. If the elections (not to mention the European Debt Crisis) are resolved in a more market friendly direction, then a rally to new highs at 1450 or above on the S&P 500 could be considered. Until then, the market will probably remain choppy with above average daily volatility.
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