With crappy housing news, crappy earnings reports, and just a plain crappy environment in general, what;s a trader to do? Why, fade the gap, of course, and if you bought in right after the open, you probably got in at the low of the day. If you shorted the break of 1070, you got trapped. The computers seem to be using breaks of 1070 as a buy signal, because it happened immediately. Volume picked up a little, and the intraday resistance at 1075, which held for a little while, finally broke. Today I have the simple moving averages, and so far the SPX seems to be keying off the 200 day simple, but we do have an important test with the 50 looming.
The Nasdaq seems to be keying off the 50 day simple average, getting rejected 3 times in the last few months, although last time the rejection did not cause a huge drop. This appears to be gaining a little traction and may be ready for another assault. The price relative line is ever so slowly gaining a little strength as well.
The market had every reason to sell off, and did just the opposite. 1070 is shoing itself as the line in the sand where the buyers move in, and so far 1100 has been where the selling starts. We are stuck right in between. One of those levels is going to give, and there's not much to do until one does.
I will have the new highs update shortly.