Last week we suggested three good reasons why the market is due for a bounce. The 1289-1290 support zone held, and the SPX gained 22 points. In the process it even managed to close above the daily pivot line at 1317:

Source: Oddstrader

The outlook going forward, however, isn't that rosy. The SP500 remains trapped between the daily 50% and 38.2% retracement levels:

Source: OT Fibonacci

And market internals have become overbought again, placing an immediate further advance in doubt:

So far it looks like the SPX is building yet another bear flag, but the confirmation will come only with a break below the 50% retracement level at 1290.5. A jump over the 38.2% retracement at 1321.5 will open the door for a retest of the 1340 resistance level.

Source: OT Fibonacci.