A Top or a Rest Period?

Let's notice that this morning's low in the S&P 500 Index (SPX) held the lower channel support line at 1606, again preserving the larger, dominant uptrend off of the Nov. 2012 low.

In addition, the SPX has established a double low at 1598.23 on June 6, with this morning's low at 1608.07.

Bottom line: As long as the 1608.27 to 1598.23 support zone contains any forthcoming weakness, the bulls will remain in directional market control.

As for upside potential, key resistance resides at 1625 to 1632, where the SPX will test its now-declining 20-DMA.

A climb above the 20-DMA (1631.80), and above the May-June resistance line, now at 1640.25 is required to trigger powerful upside traction in the index.