Market Overview

It is now time to reflect on a market that seems to be changing.  After a very good run the S&P 500 is starting to waiver.  The stability of the market is in question, due to pressures that exist externally,  Europe, specifically Spain and Italy, has seen their overnight rates rise on their bonds.  The other data that may come in under expectations is the earnings of companies.  Not to say some companies wont do well, but on the whole it looks like this maybe a less than stellar earnings season.

Since this is a technical analysis website and blog lets dive into the mixed technical bag that the S&P 500 is showing.

The Good

The SPY is in a correction of sorts the mechanics of this correction are reflected in the trend-line that has been in place since December.  Each time price bouncing of that trend-line.  The other key feature is the support that is in place at $135 it represents the tops of last year and the break out this year.  The price today is converging on all 3 support levels.  And usually with a surge in volume 228 million plus shares traded today it is possible the sellers have exhausted themselves and buyers will find a new reason  to get in.  Indicators like Stochastic's are showing oversold conditions first time since late November which could help with another push up.



The Less than Good

The price action today was very bear oriented not good if you are going to continue trends.  We also broke our high in March at $138 yesterday.  And what is fueling this are European worries about Spain and Italy, not to mention that U.S. jobs numbers didnt seem to fall in line with expectations.

I am watching to see if $135 holds or is broken or to see  if the bounce occurs and if it is short lived at $140 then get short.  Right now the market changed and I am out of the majority of my long positions except ones I am deep in the money on.

Remember if you are uncertain about what to trade. Don't!  You usually end up regretting it. Be patient and wait for the right set up.

This commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.