Courtesy of John Nyaradi.

I predict another S&P 500 rise for Friday after yesterday’s huge gains

I predict another rise for the S&P 500 (NYSEARCA:SPY) for Friday, due to yesterday’s enormous gains and the fact that both sides in Congress are actually talking.  Yesterday, stock markets saw a euphoric day, with the S&P 500 (NYSEARCA:SPY) rising 2.18%, the Dow Jones Industrial Average (NYSEARCA:DIA) rising 2.18% to finish its best day since December 2011, and with the NASDAQ 100 (NASDAQ:QQQ) rising 2.26%.

It turns out that every one of my instincts was wrong yesterday and that every one of my indicators was correct yesterday as we witnessed the Dow’s (NYSEARCA:DIA) best day since December 2011 alongside a roaring S&P 500 (NYSEARCA:SPY).  Lesson learned: always follow your indicators.  Today, my gut is telling me we might have a correction, but I still believe that stock markets can go higher, and my indicators support a higher S&P 500 (NYSEARCA:SPY) for Friday.

The main reason for my bullishness is the fact that Congress is actually talking again, which is a rare luxury these days, especially 10 days into the US Government shutdown.  Both sides have called the talks constructive, although a solution has yet to be found for the debt ceiling debate or the US Government shutdown.  Still, stock markets partied hard yesterday on just a whiff of compromise, so I would imagine actual steps should kick stock markets up higher today, despite the fact that Congress just may kick the can down the road one more time.  Progress can sometimes look like moving glaciers, especially these days in Washington.

Technically speaking, the S&P 500 (NYSEARCA:SPY) had one hell of a day yesterday, with a 2.18% gain and a solid break back through its 50 day moving average.  Typically moving day averages provide stiff barriers of resistance or support, so the fact that we are back on the positive side of the 50 day moving day average is very encouraging for the bulls.  Also, the MACD has lessened from yesterday to just 3.55; momentum definitely appears to be on our side once again.  The RSI has responded well as and now rests at 53.58, a positive position.  Nothing like a 2% gain to get the bulls charging again:

chart courtesy of stockcharts.com

Internationally, European stock markets across the board had a euphoric rise behind the United States, and Asian markets are currently trading well into the green at the time of this writing.  Investors abroad appear to at least be hopeful of a Capitol Hill compromise.

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