As I suspected yesterday, the attraction of the daily pivot was not enough to keep the Dow from gaining 109 points today to close at 11980.52, putting us within shouting distance of the 12K mark. Today was clearly a very good day indeed. So what's next?
First of all, today's gain propeled us so far above the top of the RTC, I may have to start a new channel. In fact, we're now approaching the top of the weekly RTC that goes back to the beginning of last December. From the current level, it would take a one day drop to 11,836, a 145 point tumble just to get us to a bearish setup. I just don't see that happening tomorrow, not with a Fed meeting starting. I expect tomorrow to be fairly quiet, pending the utterances from the Oracles at Delphi. Also, tomorrow night we have our Fearless Leader who will no doubt deliver a real rah-rah business-friendly pep talk that should help out the markets on Wednesday. I can almost guarantee he's not going to say "Now is not the time for profits". So that's the good part.
The bad part is that today's volume was noticeably lower than yesterday's, despite the big run-up in prices, implying that we're running out of buyers at these levels. Also, we now have the psychological 12K resistance level to deal with. These "even number" levels usually take a few days to cross successfully. Check it out - here's a trip down memory lane of the last time we crossed the 12K level (going up).
So given all of the above, I don't think we're going to see much of an advance tomorrow, if any, but I also don't see a big tumble (though I have no doubt we'll see a pullback of some sort within two months).