Stock markets show they're not ready to roll over yet, as financials retest upward

Stock markets were able fo find support today, and even get a boost from the favorable Chicago PMI report to move back above SPX 1092 to retest 1097. The charts below show that the financials which supposedly led the rally today were actually retesting back up to technical levels which remain resistance for now. The NYAD moved positive of course, but not enough to show a breakout. So the markets have hung in for another day, trying to bide time for a possible re-testing of upper resistance such as SPX 1100. That may happen, will see, but also may need more "downtime" first. That doesn't necessarily mean a huge drop. Just as 1100 is resistance, SPX is getting support above 1082, and it would take a break of 1082 to get more bearish. Instead, it's looking like a sideways consolidation or churning and for a trend trade needs to break above or below. Meantime, daytraders are making money on both sides as the SPX moves up and down in the current range.

Technically, with the higher volumes that came in today, the SPX got support above the 1084 level that's important now, and 1087, which happens now to be the area of the Bollinger Band (BB) midline. And it halted at the 1097 level which now happens to be the 13-day exponential moving average (EMA). This gives added reason to get more bearish if the SPX moves under 1082 because that would also be a loss of the BB midline. From an Elliott Wave perspective, I'm finding the moves to be too choppy to give me a satisfying wave count. So I'm tempted to think if terms of an extended fourth-wave consolidation but won't get wedded to the idea.

I've included below the hourly charts of Goldman Sachs and the XLF (also a daily chart of the XLF). A positive way of looking at this is that they didn't drop today, and they could be building a base. Actually we've got the idea that GS may be working on a 4th wave consolidation so that idea of a base could be right ... but kinda think GS needs to test down to the $150's first. That's one reason we weren't tempted to buy as it and XLF flicked up into MA and BB resistance today.

The second chart below is an hourly chart of FXE, the ETF that tracks the euro. It's moving inversely to the $USD dollar index. You can see the break where the euro dropped sharply but today recovered, though not all the way. This is certainly an important factor we and others are watching closely because currently, dollar weakness still favors equities.

I reviewed an interesting analysis today saying that the dollar won't always move inverse to commodities. It reminds me of the point that it won't always move inverse to equities either. But today the inverse correlation seems intact still.