2120 on the S&P 500 Index (SPX) is starting to look like a critical level that the market must hold. A few weeks ago the market bounced at the first resistance level tweeted by traders on Twitter. Since that time traders have simply been chasing price and not tweeting anticipation of higher prices. This indicates that everyone is waiting to see if 2120 breaks to the downside (rather than looking up in hope).
As the market is testing support, the number of bullish stocks on Twitter has dipped to what normally counts as a bullish floor. This indicates that if 2120 on SPX breaks lower the number of bullish stocks will dip back into bear market territory.
One ray of hope comes from daily sentiment readings. On Wednesday when SPX broke above 2140 the bears went silent. The bulls didn’t increase their intensity, but the silence from the bears indicates that they may capitulate if the market can get above the 2140 to 2150 area and hold.
Everyone is watching to see if 2120 on SPX holds. The bears got discouraged when the market got above 2140. It feels like the spring is coiling tight and a break one way or the other should come soon.