Market Review 7/19 Hitting a Top

All good rallies must come to an end.  The rally we have seen over the last week has been really good.  Some takeaways are the companies that have reported earnings, so far, are in decent shape.  They're not killing it, but they are in good shape.  This maybe echoes a little what Ben testified to the congressional panel on Tuesday and Wednesday, that things are still growing modestly here, but there needs to be significant movement in the employment area. So far the U.S. is not going to fall of a cliff.  Neither is China, they're experiencing some growing pains, but with the resources and human capital aviable to China their economy will continue to do well into the future.

However, those across the pond are still a threat.  With nothing really set in stone for Europe to deal with its debt crisis their problems will continue to act as a dampener to our markets.  We've seen it before, in some weeks we have seen good numbers, or decent economic numbers come out here, but then Spain this, or Greece that, just shoots a hole in our rain barell and its going to continue until they get a fix.

So we will continue to see markets go through fits and starts, periods of volatility with bearish tilts, and in the midst of those bearish fits, we here the rumor of some movement here or talk there or that policy is being discussed and the market gets a little bit of a rally.  I think we may be getting close to this rally fizzling out.

The price action today was neutral the SPY did nothing today.  After an advance like we have seen in the last week its time to recognize a top maybe forming.  The $138/$140 level is pretty much a fortress of resistance.  Most people who bought calls or stocks in April and stuck with them through this down turn and now its close to break even will unload them so they can get back at least most of what they traded.  That is why for the bears seeing the $138 level is like seeing a meal in the forest.



As of right now the Asian markets are down.



The US index futures are pointing to a lower open as well.


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Disclaimer: This article is intended to be informative and does not constitute a buy, hold, or sell recommendation., and should not be construed as personalized advice as it does not take into account your specific situation or objectives