Watch out next critical resistance 1082-1085

Market up 9.98 points. I day trade today with all the strategy, trading plan and resistance numbers I mentioned yesterday. It was a very successful trading day.

Market gap up with tremendous momentum from yesterday resistance 1062 to next resistance 1071, I didn't wait for market fade out and short it right away because the 5, 15 and 60 minutes RSI and stochastics were at very extreme overbought level, I am very sure the market would not sustain at this situation. I bought SPXU and TYP at the best price level which is the market top of the day. I sold half of my position at the S&P 1058 support area. Market resume the strength at the late trading section, I sold all of the rest at the end of the day.

Once again, critical support and resistance level combine with extreme technical indicator numbers prove to be the best risk reward ratio to play the market reversal. I didn't hold any position because market is at critical resistance level 1071, however, the momentum at the end of the day is so strong that it may extend to the next critical resistance 1082-1086.

Bull have to be very careful with the next two resistances which are 1082-1086 and 1100-1104. I suggest you to lighten your long position on the way up because I have told you thousand times that the rally start from March, 2009 to April, 2010 is a counter trend rally in bear market, and the rally from 1010 we are seeing right now may be a dead cat bounce. Nobody sure about the length and magnitude of each rally, but we can have a better perspective and judgment with the help of all the technical indicators and critical resistances and supports.

I do a fibonacci projection with 1010 low, 1042 first high and 1018 first low, then I find out some resistance targets for this rally, they are 1038, 1050, 1062, 1070, 1082, 1102.
At the same time, I find out the 50% and 61.8% fibonacci level 1071 and 1085 of last leg down from 1131 to 1010 are very similar to my projection numbers.

Base on the above projection and retractment numbers, I will short this market again when it reach the critical resistance 1082-1085 and the major resistance 1100-1104 combining with extreme overbought indicators. I don't short it at the current resistance 1071 because the market today seems very strong and I count the elliott wave for this rally, seems like we need one more wave up to complete this rally, therefore 1080-1085 is pretty good projection.