Technical Picture - Bullish Gap on Light Volume

The U.S. markets gapped up wide following a strong performance overseas in the wake of positive developments at the Japanese nuclear facilities, ongoing military actions over Libyan airspace, and M&A activity. Price rallied for the first 45 minutes of trade and then stalled near the 62% retracement (ambush zone) of the last leg down. We went into a narrow sideways consolidation for the rest of the session, implying only muted selling pressure.

As we can see from the SPY chart below, we have gap support below today's price and gap resistance near the $131.00 level. The low volume on this retracement effort implies lack of conviction by the bulls, hence we remain cautious until further proof.