Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Interesting spot here on the S&P 500 as we have both a gap overhead (created by the Friday labor report) and a gap underneath (created by the EU summit). This morning we are gapping up (yet again) into the Friday gap, which would fill up at 136.29 on the SPY chart.
As for the action, we’ve had three days of correction after that extreme overbought reading I mentioned middle of last week. While the S&P 500 came down to the top of that Europe gap up area – and tested slightly below it – the market held in ok. The longer this index stays over 1345 the better… but at worst bulls want to see 1335-1338 held.
News has been poor all around the past few days so this relatively limited selloff is a positive, if this is all that happens. To the upside the 1370 area has been the issue for months so clearing that would be a positive.
Google (GOOG) reports Thursday and JPMorgan (JPM) Friday, as we all prepare for Apple (AAPL) which appears to have begun its pre-earnings run. The U.S. dollar and bonds continue to rally which continue to be flies in the ointment.
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