SPY Chart 5/3 The Next Leg up

The SPY chart struck me as very reminiscent of last years pull back in April where it dropped to a low climbed and then had a short term pullback.  This time around the pullback has not broken the major 50 day EMA and it has not been as volatile that is good news.




 The strength of the intermediate trend is still in place buyers are ready and continuing to buy the dips, but if we break through the support line in place around $136 I think we could see some strong selling.



 I still believe there is still reason to be optimistic here earnings are still proceeding well and we have not seen economic conditions in the states erode to the degree that it would warrant concern.

Europe looks like it is in a recession and continues to be the wildcard in the markets keeping an eye on yields in Spain is wise as that really is the wild card that can through the markets into sell off mode.  China is also still in play they need to be strong economically in order to offset the recession and weakness in Europe.

Tomorrow will most likely be somewhat muted unless job employment numbers come in unexpectedly high and I don't for see that.  We could see the SPY drop a little bit more tomorrow and this would shape up for earnings to be back in focus next week.

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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.