Trends
The trend-line since November is still holding and the 50 day EMA has still not been breached and since the low of last week we are still trading above that. These are all good things regarding intermediate trend.
The 20 day EMA is starting to form a bit of resistance and in my opinion until the price gets above $138.69 and stays we may see the SPY range bound between a low of $134 and $138.
Slo Stochastic
With this indicator there is some divergence. As price was still rising we can see the indicator start to create lower highs. Plus the move today shows that the stochastic may have another short term down this week.
If your looking to make trades be cautious as we are in somewhat of a bottoming period and volatility has come back into the market. Any positions I initiate will be very short term in nature until the intermediate uptrend resumes.
The News
Retail sales rose .8% and that was a little bit of a surprise. Homebuilder confidence slipped and Empire Manufacturing fell to its lowest level in five months. So even the economic data is mixed we have some good and some not so good. This week Thursdays economic news will be something to watch especially initial claims if we can get a positive number instead of a slow dwindling down that can help boost the market.
Earnings will hopefully give us a bump with a number of companies reporting this week. IBM will release Tuesday and can set the tone for tech stocks, YUM Brands is also set to release on Wednesday. If the overall majority of earnings this week is good along with good economic data, and now real surprise out of Europe that can help propel the market a little higher.
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Disclaimer: This article is intended to be informative and should not be construed as personalized advice as it does not take into account your specific situation or objectives.
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