9:19 AM – Once price got above the zone we had on the board for yesterday, they gapped up in the premarket and went straight to the next level we had on the board, 685.66, where they stalled out. It’s the same area they’re currently fighting to get above as of 8:45 AM this morning. It’s been interesting lately how often levels identified before the opening bell on one day, come into play and are relevant and still tradeable areas the following day in the premarket.

So this morning, the bulls have successfully gotten price above at least two important areas – one is a major retracement level from the October 29 high to the November 7 low. And another important area is a trendline that price rode under a lot of the day yesterday. For today, that trendline equates to about 683.45 and is the bull axis. Staying above that area is better for the bulls. Although for the bulls to keep climbing, they’ll need to establish closes above the zone at 685.70 to 686.07. There is room for them to run a little if they establish closes above 686.07.

The bear axis for this morning is 682.15. If we see closes of intermediate and longer time frames below 682.15, the bears may have a better chance at pulling price down more. Like most axis levels, I’d want to see more reasons why price might react there before trading against them. They are useful as gauges to help determine whether the current market is mostly bullish or mostly bearish. From where we sit currently, there is nothing bearish about the SPY. That’s not to say price can’t pull back at any point to test support areas, but until or unless price gets below important levels and establish multiple significant closes below those areas, the bulls will stay in charge.