The bounce off the 50% retracement theme continued today. We've also bounced off the SPX 1100 level, now support, which is significant as breaking below would be confirmation of the down trend. Below is the 5m chart for SPX. Note that the trading range appears to be 1100 and the 50% fib level of 1120. But near term we've bounced off 1100 with some ammunition left on the stochastics.
We've had some negative news, which could have turned us bearing, beige book, consumer confidence and BP. But on the daily chart it appears that the upward trend is still in place.
SPX rallied yet another day, bouncing off the 50% Fibonnaci retracement level. Chart below shows the 15min bars. I think there is some loss of steam here. If that leads to a selloff is yet to be seen. Today, the market shrugged BP's huge writeoff and a decline in Consumer confidence. The news might overhang tomorrows trading.
We've breached the SPX 1100 and are now resting right on the daily MA(200). At SPX 1120 is the 50% retracement level from the high of 2008 and the lows of 2009. The current levels nearness and the large time-range for the Fib, it seems that we shall definitely rally to it. The big question is whether we shall continue beyond it or sell off from it. The markets have rallied hard the last few days and are overbought, market internals are lagging the current rally. Which hints at better odds of a sell off as we touch SPX 1120.
Strong rebound today from the lows at open (roughly +250pts). Below is the long range chart of SPX (1hr), see how the resistance has played out in the past (since the April highs) It would be critical for the index to break over this line for any hope of a continuation. Beyond it are the daily MA(50) and 1100 (red line) then the MA(200). But we'll see when we get there, although if we cannot then we're back to looking at the abyss. Watch for the resistance tomorrow, it is too near to not be tested, might be a good shorting opportunity.
The weakness I mentioned in the previous post carried into Friday last week, also options expiration day, with the SPX crashing 3%. Today the markets opened higher, slid into negative territory and made a come back to close in the green for the day. IBM reported earnings after hours and missed consensus, markets have turned negative on the news after hours. On the SPX chart, the reversal from the most prominent resistance level 1100 seems to be gaining momentum and a retest of the recent lows of 1020 seems likely, unless news drives us higher.
Markets got wind from news of BP plugging the leak and GS settling with SEC as it was declining from resistance, only to reverse course and rally to close flat for yet another day. Overhead resistance appears to be a 1090 and intraday weakness continued for a second day with news driving markets higher towards close, see arrows on chart below. A short bias on rallies and caution on news as it comes is warranted.
The market threw a surprise today leaving many bears stopped out and mad! .. The volume picked up a bit after Alcoa reported results. Tonight Intel reported yet another stellar quarter, best in a decade, which could push us higher over a few resistance. Just what the doctors ordered for the bulls. Notice SPX upward resistance level 1100 is back in play. SMA(50) is where the market is resting at close today. Anything above would officially break the bear market. Be cautious
While the last few days we've seen a strong reversal from the calamitous lows below SPX 1040, the rally seems to be losing steam. Trading volume has been quite weak, see chart. While this does not mean a sell off is on the cards, it does imply that the market is looking for a reason for continuation. Earnings releases will provide the fodder (or not) for the market sentiment. Alcoa reported a good quarter today, beating analyst estimates. This is quite interesting as the company is linked to manufacturing and could signal a recovery. We'll look for confirmation in the days to come.
Looking at IWM, the midcap etf, we can see its trading in a channel and the SMA(50, 100) haven't formed the death cross although the pattern is a bearish falling wedge with lower lows and rallies on declining volume. It might send us lower.
SPX rallied 3.13% up 32 pts today.
Stocks rallied earlier on in the day with SPX retesting the all important level of 1040, yielding to the bears towards the close. The bias remains short and we need to rally beyond 1040 to confirm the reversal. There is definitely some support here (see 10min chart below) but we must remain cautious.
Interesting times! Hearing a lot of bearish tone (obituary of the stock markets etc., esp from the EWT folks). As I pointed out earlier, SPX level of 1040 is critical and we dipped below it this week. The bulls must hold or push higher or else there is no support all the way down, they did so atleast today. Today we bounced off the lows and formed a bullish wedge pattern on the intraday bars (chart below).
Another interesting theme today was the plunge in gold prices. GLD etf fell $4.65 (chart below) and the 20yr treasury etf dipped lower above the high mark of $100. Seems like a few positives indications, along with the after market S&P futures are pointing higher. But, tomorrow a.m. is employment data and odds are that it would send us south of here. 
