With last Thursday’s breakout to the upside by the Standard & Poors 500 Index over the 1,390 level, the technical indicators were mostly positive.
So far, $SPX has been able to hold above that level, which confirms the upside breakout. A more significant breakout would occur if SPX could rise above 1,420, for that is not only the high for this year (2012) but is also the high for 2008. A move above there would certainly cause the bears to begin throwing in the towel. Also, a move above 1,420 would activate targets in the low 1,500’s and possibly even augur for a challenge of the 2007 all-time highs near SPX 1,570.
However, not all is positive in the markets. Traders are generally nervous and actually quite negative. This is not a problem, unless they act in some crazy manner in a unilateral fashion. Right now, everyone seems to have their eye on the unemployment report due out on Friday morning. Today’s ADP unemployment report fell short of expectations, and the market had to absorb a healthy round of selling as a result. So, a poor jobs number on Friday may cause the market to test support. But as long as that support holds, the bulls have the upper hand...
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