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BofA Merrill Lynch: Here’s how to play the rally

Talking Numbers

MacNeil Curry, Head of Global Technical Strategy at Bank of America Merrill Lynch, discusses what indicators to watch in this market.

The market was up Thursday on hopes the US Congress and the President can come to an agreement on the budget and the debt ceiling. The S&P 500 closed over 2% at the end of the day's trading session.

The markets shouldn't celebrate just yet, says MacNeil Curry, Head of Global Technical Strategy at Bank of America Merrill Lynch. Bulls in the S&P 500 index would need to overcome 1687.15 for them to gain control of the market, wrote Curry in his latest note. The S&P 500 closed at 1692.56 on Thursday.

(Watch: Stocks spike 2%, log 2nd best gains of 2013 amid debt deal hopes; Dow skyrockets 300 points)

In an interview with Talking Numbers, Curry updates his view of the markets direction.

"The way we rebounded from the recent lows in equities is actually pretty encouraging," says Curry. But, that doesn't mean all is free and clear for the markets.

"What we really need to see price action start to break out to the topside," says Curry, who also notes that he is short US Treasury futures, thus assuming there will be higher yields. "Right now, it could really be just a push higher in range. We really need to see a break of some really big technical levels in equities that say we are going to resume back to the top side and resume this much larger bull trend."

(Read: How the smart money is playing the crisis)

So what other indicators does Curry want to see from the markets to confirm a bull rally? Watch the video above to see Curry's analysis of where the markets are headed next.

More from Talking Numbers:

What impact does the government shutdown have on retail?
This sector could get a boost from Yellen
This is good for Apple’s long-term growth: Munster

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