Overall, the action was solid today. It approached the breakout as the S&P 500 neared 2119, but it wasn't meant to be. The sixty-minute short-term index charts hit 70 RSI, and that was the end of the rally for the day. The market pulled back some over the last twenty minutes. No breakout today, but that doesn't mean it won't happen as the daily-index charts are looking better. Nothing bearish in terms of the oscillators. They are confirming price. This is on the daily charts.
The weekly and monthly charts remain terrible. They will not recover. So, with today's action getting stopped out at slightly overbought, the market may need a small down-day to unwind those charts without too much price erosion. If that occurs, the market should break out, but there are no guarantees, with the headaches we have from weekly and monthly charts. The word “should” would be the operative word here, but we shall see. The bulls have reason for hope.
We finally had good earnings from Intel Corporation (NASDAQ:INTC) two nights ago. Actually it wasn't that great, but, since numbers and expectations are being bought down, this could help other big reporters to come. INTC really didn't say anything good at all, except to not take things even lower in terms of expectations. The market applauded that, since so many others are taking down expectations. Weird, but we all know the market is really another word for Disneyland, so the bulls will take it. This evening Netflix, Inc. (NASDAQ:NFLX) is flying, while SanDisk Corp. (NASDAQ:SNDK), another semiconductor stock, is falling some.
Too bad on SNDK, and, hopefully, it will turn up tomorrow, since the stock has already taken a strong hit from their earnings last quarter. They had already taken down expectations, but, apparently, things still aren't going very well. Some are good, and some are not so good. Well, ok, some are not so good, and others are less not so good to be blunt. The season is upon us. The good news, it seems, is it appears that the numbers and expectations are going down, making the future easier to deal with. You don't have to be very good, but you can still see your stock go higher, because they stopped being so terrible. Only in the world of the stock market, a.k.a. Disneyland.
We all know the numbers by now. On the S&P 500, the key, two levels are 2045 and 2119. We got close today to 2119, but pulled back from overbought. If, and when, we break above 2119, with force, the bulls will be in full control of the overall action. Bad economic news from around the world keeps coming in. We saw terrible growth numbers here at home from the key, New York manufacturing report, and from Asia last night. Bad is good, it appears, since all of this means more global stimulation and low rates for forever. As long as the numbers are weak, the market has a very strong chance to break out. Rates are the key. They have been and will continue to be. One day at a time as we watch to see whether the S&P 500 can make 2119 disappear in the rear-view mirror.