SPY Charts 7/10 Short Term Bullish Trend in Jeopardy

The markets started out this morning in positive territory. There was a bump about mid morning after euro-zone finance ministers agreed to make €30 billion ($36.94 billion) in aid available for Spain's banking industry and extended time to help them reach deficit targets.

Then there was the usual nervousness as the market reacted to rising yields in Italy, but what weighed heavy on the markets was corporate guidance and earnings in the industrial and technology sectors.

Alcoa (AA) reported disappointing earnings.  Other heavy industrial company's like Cummins (CMI) and Caterpillar (CAT) have noted that their is week guidance for the next 12 months.  This is having a downward pull on the markets in general.  If industrial's continue to struggle and the tech sector shows weakness like it did today  the earnings season could be full of disappointments and that combined with complexities happening in Europe could brew up quite move down.

The SPY chart is at a critical support level at $134 and has not broken the bullish trend line yet. A bounce tomorrow would validate the $134 support level and we would see the SPY grind higher.  In light of how earnings kicked off today it might foreshadow where the market is ready to head if earnings, economic reports, and Europe, continue to disappoint.  Then down we will go.

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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