After suggesting a couple of weeks ago that I foresaw the 875 level as a possible bounce level, we hit 875.63 before backing off the past few days. However, we haven’t had much of a pullback as the market ramped the last 30 minutes yesterday into the close.
Amazon reported better than expected, may be time to take some profits if you haven’t already done so, for those of you who followe us into that trade. MSFT was about inline. Techs continue to lead this market with some amazing moves in the sector the past week.
In other fronts, the dollar got beat up pretty good during the night, while gold hit the 911 range overnite. Gold will be coming to it’s resistance level here shortly. I took a small position in GLD yesterday thinking that we may have seen the bottom. If we break the 870ish level from which we made a double bottom last week, then I’m gone.
Where do we go from here? Our intermediate rally is getting a little long in the teeth and we’re probably due for some pullback. The question is, have we already seen it with the 50 point pullback we had earlier in the week, before we push further. In my humble opinion, earnings have held up a little better than I anticipated, though admittedly many companies are simply beating the revision, the absolute numbers still not that bad in some sectors. Forget the banks, they’re all manipulating and no one including themselves, know what they’re really worth. As you can see from the chart, some key levels to watch both upward and downward. We have a potential H&S formation forming on the SPX here that bears watching. A break below the mid 820 level sets us up for a potential pullback to 780ish range.