Looking for a break of 1100 on $SPX then 1103.50 to confirm a breakout.. else consolidation

 

JP Morgan came through with an ok earnings that has released the strangle hold that came over the markets yesterday.   It was good that we held on and didn’t fall apart Wednesday but the bad thing was we made no progress.  Nasdaq did, they made new highs, but the Rut, the NYSE, the DOW, the S&P500 all rallied to their Tuesday highs from a weak open and then sold off in the afternoon and rallied to lower highs at the close.   I like to see a probe higher, even if we can’t hold it.  I like it because a). it improves breadth data (new highs) and b.) it is like a probing mission into enemy territory, it tells us  something about the makeup of the market at that new territory.   How heavily defended is it.  Where are the defenses set up.  So we didn’t get that and now we have to rely on historical resistance areas and predictive areas from Fibonacci and others.

 

Earnings, are this week’s driver and the banks are the most important piece missing yesterday.  We can not go higher without them and fear has paralyzed their momentum.  With JPM out of the way this morning maybe they can join the rally parade once again and we can make more headway.  I hope you are using the links in you email to find out the earnings for the day and how they have come in so far.  It is a great link to briefing.com and I sometimes forget about it since we are not always in earnings mode.

 

Quote of the day:
I’m living so far beyond my income that we may almost be said to be living apart. – e e cummings

 

Chart

Score

 Day-1

Change

40 DPI

+2

+6

-4

52 WNH

+4

+6

-2

10 DHL

0

+6

-6

Total

+6

+18

-12

 

The lack of any upward progress shaved a lot of positive breadth off the  charts yesterday.  We are still hanging on the bull side of the line but we need a rally up to higher numbers to keep the bulls snorting.  Yesterday they were wheezing.  The trending 40 DPI has room for a couple of days of weakness but after that we are starting to get to numbers that could need some correction.  Yesterday helped ease some of the correction pressure let’s see if the bulls can take advantage.

 

$SPX chart:

 

The great things about a sideways day is that I do not have to adjust the chart. The upside magic number to break today is the psych 1100.  A breakout above 1103.50 would resume the rally anything else is just consolidation.  I pinked the 1089 area to the downside as having been tested 3x now.. we would like to hold there as a breakthrough will most likely trigger a breakdown.  Let’s see which way the market breaks.  The futures as we sit at 7:40 are up slightly and will have us opening near 1098 if they hold.

 

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