While many had their fur up as we broke above the 200 day simple moving average, as I've stated I'm an exponential moving average kind of guy. The 200 day has slowly descended from S&P 940 to 936 of late and that is a very key line for me. If the market can show enough strength to break over it would be a good thing for the bull side. As expected JPMorgan (JPM) "surprised" the Street with a big beat (by surprise I mean I was blogging about it for a few days) and then tonight a Google (GOOG) surprise would be enough to get us over this level as long as we don't break down here later in the day.
Remember, the market has been marked by 2 sort of days for much of the past year... either a (a) flip flop range bound in narrow place day or (b) a trend day - whatever the direction is by 10:30 AM - 11:00 AM we seem to only continue in that direction. Very rarely do we ever get "reversal" days anymore. I have no idea why this is, I am sure something to do with the dominance of momentum based program trading which is seemingly replacing humans at a frightening pace. I'm been taking advantage of these trend days with intraday index purchases (or shorts) [in, then back out by the end of the day] - it doesn't work all the time but anything that works 80%+ of the time on Wall Street is like a gold mine.
So we will see if today is a day (a) or a day (b) in the next hour. I would assume with that big resistance ahead it will be hard to be a trend day as we await the Googler, so I am betting on (a).
The other wrinkle is the market likes to inflict as much pain as possible... so a Google gap up open tomorrow over that key resistance area would bring in the rush of technical analysis based buyers ready to declare the bear market over as the final 200 day moving average has been breached successfully. In the old days that is exactly when the market would reverse itself, trapping all those so sure of themselves. But these are not the old days, so I don't know how we would react.
Please don't neglect that gap down at S&P 906... it will be filled.
Again for newer readers I seem to be obsessed with the S&P 500 eh? This is not your daddy's stock market where individual stocks matter anymore. When the market is up, you can shoot a fish in a barrel and buy almost any stock and win. And vice versa when the stock market is down. There is very little fundamental differentiation amongs stocks anymore - they simply mostly all go up, with the tide or down. Hence I am focused to waste a ton of time guestimating where the market will be going, rather than the individual metrics of companies. This might be a permanent change with the dominance of HAL9000 type of trading.
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