Thursday, July 15, 2010

Stock market knocks on door to more upside as euro tests for resistance

The stock market has risen - and fallen and risen - and fallen and risen again - to test and retest the important price level of 1097 in the S&P 500 index ($SPX), along with important moving averages in equities and certain commodities like oil and gold ... at the same time the euro (and yen) have displayed strength. Today the euro rose almost spot onto a price resistance level above approximately 129.40-ish or so in the euro index ($XEU). And the $SPX closed slightly under 1097 after an intraday pattern that will have Elliott Wave analysts trying to decipher for bullishness or bearishness. Well, the market's gonna do what it wants, and the strength HAS been surprising. What I've gotta come down to though, is let the market show us. Technically I could see the market breaking lower OR higher, even though I've remained in the skeptical camp.

If the $SPX has trouble staying over 1082, that will be more short-term bearish. Today the market looked like it might lose that support level. So be alert in case you see that happening! Another sign would be if the euro printed a reversal pattern. The market isn't out of the woods ... yet.

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