SPX continues Sideways Pattern

The SPX has been in a 50pt channel between 1490 and 1550 for just over 2 months now. The price is trying to hang on to the green upward trendline, and despite the strength in the Tech Sector that's help fuel the Nasdaq, the broad market S&P 500 Index just hasn't seen the same optimism. If we're looking for gauge of the overall markets, this is the best index to look at, and the price action to this point continues to show consolidation in this range. Of note is a possible double top on the Daily Chart which to this point has seemed to fail. The one caveat to it's potential failure is that it was done on a holiday week in the summer with VERY light volume. Friday will likely have very light volume again as we go into the weekend so we'll see what news comes out Friday AM to either ignite the market to new highs or punch it another leg down... the 3 possibility is some boring chop sideways.

Earnings announcements start on Monday with Alcoa (AA) so keep your ears open for any earnings "warnings" as that may start to paint the real sentiment for the summer market direction. Although it doesn't seem plausable, I wouldn't be a bit surprised if everyone had great earnings and the market goes on another tear higher. Nothing surprises me anymore and it shouldn't surprise you either. Remember that the market is very good at disappointing those who try to trade based on logic.

SPX 1 yr / Daily Chart

RUT Holding the Uptrend

The Russell 2000 continues to hold the uptrend, and broke above the short-term downtrend channel that had started about 4 weeks ago. The key wiil be to continue holding above this level. The RUT found support at the top of that line today and finished up strong in the 850 area which has some horizontal resistance.

RUT 1 yr / Daily Chart

We have a nice sideways pattern playing out on the RUT right now --

NDX Strength

With the light volume in trading this holiday week, the techs got a nice boost with strength coming from strong Apple iPhones sales and the announcement that RIMM has been cleared by the Chinese government to sell Blackberries into China. Those items were cited for the gains in AAPL and RIMM today that further ignited the Nasdaq 100.

Looking at the Charts we can see that the NDX has broken above it's channel on the weekly chart.

NDX 5yr / Weekly Chart

Note that this upward channel line has held for over 2 1/2 years



NDX 20 day / 15 min Chart

Notice how we paused awhile today at the 161.8% fib, but then closed above at the end of the day.

SPX Trendline Resistance Revisited

Today's price action on the SPX found resistance again under the upward trendline. We'll see what tomorrow brings.

SPX Monday 20day 15m Chart

RUT at Trendline Resistance Again

The RUT hit it's head on the downward channel trendline again today but is holding well at that level. Tomorrow we'll want to see if it can pop and hold above which if confirmed might turn out to be a nice move to the upside.

RUT 20day / 15m Chart

SPX Lines

Keep an eye on the SPX today as it may try to close above the upward trendline that's been acting as resistance for the past few days. Notice today's bar is close to touching so far, but the rest of the days action will tell the real story.

SPX Daily Chart

RUT at Pivotal Juncture

The Russell will be at a pivotal juncture this week as we'll see if it finds support on it's long term uptrend line or if it finally breaks trend and embarks on it's continued downward channel. Currently we have both an uptrend and short term downtrend channel intact as it's been trading in a tighter and tighter pattern. On Thursday and Friday the RUT hit it's head on the downward channel resistance line (Red Circle) and found support on Friday afternoon at the 50MA of the Daily Chart. For Monday and Tuesday we'll want to watch carefully to see if it can hold above the 826 level to keep the uptrend intact. If not, it is very likely that it will fall to the 815 area where it should find both horizontal, fib and trendline support. The past 6 weeks have formed a wedge-like pattern on the daily chart so keep a close eye on the breakout of this pattern.

RUT 1yr Daily Chart



RUT 30day 60m Chart
Here's a close up of the downtrend channel that the RUT has started to form