The odds for extended Minor fifth wave become real , but not confirmed yet. The positive market bias still leads the price. Next short term resistance 1299.26 probably won't be a problem, because the bulls missed to touch 1300 last week, and I'am sure they will make another attempt. And 1304 is important angle acording to my Gann angle calculator.
1270.67 appears to be very strong support at least short term. If the bears get this support in the course of the week, will begin a correction. If that happens, the move will be very lazy, and probably will nest the price at the next support/resistance- around 1249.
There are many bearish calls last few days in the blogosphere, but I realy don't see any meaningful reason for dramatic and sharp sell off very short term. "What everyone knows is not worth knowing".
In 1/19/2011 the price broke dramatically 1287.25, touched 1270.75, and produced reversal daily candle, which closed above the pink line (Gann angle). If we don't see weekly close below the main Gann angle, probably the price will bounce directly to 1360-1378 range, without a roundabout way.
The upper channel line just stopped the bounsing price, but not for a long time. Typically for this index is extended first wave. It occurs very often.
I haven't labeled this sharp move, because I am not sure that first wave has already unfolded and complete.
"Grand picture" looks the same as it was last month-bullish long term. We are getting closer to weekly, and very strong resistance 3025-3043. We have Head and Shoulders pattern, whose projected target will be met this year probably.
Good luck trading!