As to the core S&P 500 index and Navigator Algorithm, the value area was unchanged yesterday, signaling that the recent higher prices are being accepted – albeit with significant breadth concerns and non-confirmation of all major indices. The gap below us remained unfilled yesterday, another sign of strength.

The market will open within the past three days’ range, with prices very close to the overnight high. Regular session sellers were muted on yesterday’s expected liquidation break, and sellers also failed to take control overnight.

So the path of least (or perhaps lesser) resistance remains higher, with the breadth caveats mentioned above. Remember, a break above the February 2nd high will be a breakout from two days of balance and could trigger a Navigator buy signal. A look above and fail would bring us back to the lows of the past few days around 3800 and potentially into the unfilled gap from there.

With cyclical down forces in place until mid-February, we are still in a caution zone for swing trading, though I will continue to take advantage of the short-term swings in the Founders Group.

Despite the generally overvalued, leveraged, and euphoric market, opportunities are everywhere beneath the surface.