Good morning. The charts are all bullish and overbought but telling us more upside is left. That does not mean we won't have some red to consolidate the strong upside move we are having, but it is difficult to predict when that will come in.
The world:
Asia
China is back and trying to catch up to what it missed while they were celebrating the year of the tiger. Japan put in an even stronger performance.
Europe
Europe is acting hung over from last weeks gains on a lazy Monday.
United States
Economic news
There is no news out this morning.
Earnings
We are still getting earnings coming in. and the results so far this year are painting a picture of a recovering economy.
Breadth Charts
40 DMA % Index
10 Day High - Low
52 Week New Highs
Conclusion
| Chart | Score |
| 40 DMA % Index | +6 |
| 10 Day High - Low | +6 |
| 52 Week New Highs | +6 |
| Total | +18 |
The charts put in a perfect +18 today. I have no comments except to say that the NAZ and RUT took it easy Thursday for Friday's run which is overall healthy. Any day now, if this rally cycles like the previous, we should get some selling with the day after the selling quite bullish, so buy the pullbacks.
$SPX
I don't think the bulls can keep up this pace but regardless momentum and acceleration are in the right direction and we will be going higher from here. On the 15 minute chart you can draw a trend line connecting the lows from the last few days and watch the pace of price and see if we slow down. We will go higher from here just maybe not at this pace and with this amount of conviction.
Major resistance lines are at 1114.50 on the upside and 1104 and 1100 on the downside. We should stay within that range today. A breakout to the upside would indicate a run away market. The 1110 area where we closed on Friday is the 61% fib retracement number so watch that for support and resistance too.
Bulls Plan: Hold any gap opening and continue marching up the trendline. Print some prices above 1112.50 and close above 1110 would suffice. Extra credit for a close above 1112.50 and prices above 1114.50.
Bears Plan: Snap the gap and set a lower low below 1106.50. Prints below 1104 and a failed rally to get back above 1110 from below would put the charts neutral and setup some doubt for the bulls. Anything more than that will put the doubt in me.
see you in the markets.
Marlin aka RedlionTrader
