I love drawing lines on the charts to see if there's any reason why the index may have found support or resistance in a particular area.  After finding support at the 200-day EMA, and what appears to be a long term support line (#1), the S&P 500 has now rallied just above the old support line / turned resistance (#2) to the top of the recent 1260 - 1300 range by closing at 1297.  The top of the descending trading channel and the 50-day EMA (1303) are now just overhead.
                         
                        Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk

I am concerned that we could see typical holiday reversal where the action prior to the holiday gets reversed after the holiday.  That would likely start today or tomorrow so we almost need to take a contrarian view to how this week finishes out.

The PMO indicator has made a crossover buy signal, but because of the light volume holiday trading, can we trust all of the positive action?  Perhaps.

The low volume rally is usually a concern - at least theoretically - but our friends at sentimenTrader.com do what they do best, which is put these clichés to the test. 

According to sentimenTrader.com:

"The table below shows how the S&P performed when it hit a three-month low, then rallied at least +0.75% on volume that was at least 30% below its 200-day average. Technically, the cash S&P index didn't set a three-month low on Friday, but it was extremely close, and the SPY exchange-traded fund did, so let's just pretend."

                     
                                    Chart provided courtesy of www.sentimentrader.com

You can see the results were better than random going forward, particularly after 2 weeks and 3 months, for whatever reason.  So, this is a positive sign that the current market rally could last a little longer.

Here again is the chart of the performance surrounding the 4th of July weekend.  Yesterday was day "-4" and it lived up to its historical expectation, but today (-3) would be one of the weaker days historically surrounding the holiday.  Of course seasonality is not a primary indicator but it is, what it is.
                          
                                    Chart provided courtesy of www.sentimentrader.com, analysis by TSP Talk

Big news coming out of Greece is the imminent vote on the obviously unpopular (with the protestors in Greece) austerity measures.  The markets seem to believe it will pass so it could be possible to see a "buy the rumor, sell the news" reaction.  And if the measure does not pass, it is bad news for Greece's chances for a bailout, and more than likely, bad news for the markets. 

Thanks for reading!   We'll see you back here tomorrow!