The market started the day overbought on the short-term sixty-minute charts. It seemed likely we would sell early in order to unwind those overbought conditions, but that wasn't the case at all. The market didn't blast up, as 70 RSI stopped things a bit, but it did move up some. As the day wore on, we finally started to see the oscillators unwind some as the market fell a bit. Nothing dramatic, but it fell a little bit off the highs. The reason for the fall was really more than just being overbought. There was some anxiety ahead of the Parliament vote tonight out of Greece. The wrong vote would send Greece out of the Eurozone, out of the euro, and send the global market reeling lower.
No one expects that to happen, but there was some anxiety out there, so with the averages overbought on the short-term charts, we saw the ARCA:SPY close about seventy cents off the highs. The unwinding was the important part to me. A little more would be best, but we may not get it due to earnings, but more on that in a bit. Bottom line is the market averages held well today after doing some unwinding. The oscillators pulled back rapidly with very little price erosion, which is normally good news for the bulls. We shall wait on the vote this evening, and if the vote confirms the Eurozone's demands already accepted by the Greek leader Tsipras, then that whole situation will finally be behind us. That would be very welcome news for all.
So, if Greece is finally behind us in terms of uncertainty, where do we turn for the next catalyst to bring this market up and out or down and out? The answer would be earnings. Thus far, the bulls are carrying the upper hand in a very large way. Many companies took the road of short-term pain last quarter by reporting not only poor results, but lowering the outlook by quite a bit. Many probably figured they were over doing the pessimism, but better to lower those expectations and then beat them. That's smart thinking, and thus far, it's working out quite well.
Leaders such as JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Johnson & Johnson (NYSE:JNJ), Bank of America Corporation (NYSE:BAC) and The PNC Financial Services Group, Inc. (NYSE:PNC) all did this and were rewarded over the past two days with solid up sticks. This evening, we are seeing a very powerful move out of Intel Corporation (NASDAQ:INTC), which has been a major laggard for quite some time. Important companies are reporting really good numbers based on them being lowered last quarter, and with froth the name of the game, that's good enough for most folks. There's no way to know if this trend will continue onward, but if you're a bull, you have to be very happy with what has taken place thus far on the earnings front. Tough for the bears to get much traction with these types of positive reports.
Ms. Yellen was out talking again today, and she's making sure the world knows every time she speaks now that rates will begin a slow move higher in the coming months, regardless of what happens overseas. She says she's confident that the economy is doing well enough for the cycle to begin. A slow cycle at that, but she's making sure the market is prepared, which is smart. No uncertainty. Just the fact that it will happen, but no worries, as the process will be very slow. She's also making sure everyone knows she has the market’s best interest at heart. The market can now, basically, shrug off the rate hike when it actually does take place. The Fed is in control, and won't let the market take a big hit on the interest rate front. Bottom line is the market will, hopefully, get past its biggest hurdle tonight regarding Greece. If it occurs the way the market thinks it will, it's possible earnings will be the catalyst for an eventual breakout over 2134 on the S&P 500.