Stocks Face Bumpy Road

Stocks have been edging up. If you recall, yesterday we said it was likely that they would get squeezed down to those three support levels identified, beginning at 3397, before making a run for higher levels. That is exactly what happened, albeit very quickly. If you set some limit entries here, your patience would have paid off. Now the S&P has made new relative highs, but it seems to be trekking very carefully. The Kovach OBV is rather oscillatory. In fact, it appears to have peaked, which suggests another correction. We believe stocks are due for a correction back to 3200's, before they will make new highs. Although we can't say when this will happen, consider this a buying opportunity when it does. For today, watch 3450, a technical and psychological level. It is likely to test this level a few times beforehand, even if it can break this level to the upside.