The S&P futures are building a path higher now, although it was necessary to go down yesterday’s morning to 1236.50, why I am not sure, the futures have rallied since then almost 30 handles, and with one trip down to the 1250 level early evening last night, they bounced nicely out of there, and Europe opened and then joined in on the strength end of it, and the futures are now through the “gateway” of 1260.25. If we stay above there, the first good resistance test is 1267.50. Above there we have the key pivot at 1269.75, this is where the futures go into buystalk mode, and we assume a bullish
trending mode. The Nasd closed yesterday in buystalk, and the Dow goes at 12091. If we get above there, then we may surge to the upper magnet level today of 1277.75. Under there however we could go back below the gateway of 1260.25, and then support begins at 1256.00 down to 1253.00 basically, and if the futures can be wrestled underneath that barrier, then this is where it is free to drift lower.

The S&P futures maxed last week at 1289.25, just at the .786 retracement level, and that has been enough now for this morning to be in pullback mode, however we have 1270 as the 200 day MA level in the futures, and structurally it looks like the futures get buy signals around 1267.25 or lower, so this area initially we want to be support, try to send us packing back north of the 200 day. We have built up however some overhead resistance resistance now beginning at 1272.25 to 1274.50, which should act as “heavy” effect areas, and though we could reach to the 1277.75 magnet level, we still could
be pulled back below. The key pivot today is down at 1248.75, and with the structural buy status, those levels of pricing
seem a bit tough to get to, at least in today’s fight. Perspective wise on the landscape, note that 1237.00 is the “minimum”
retracement amount or the bullish flavor persists, so we have some room to play and still be keeping this uptrend intact.

The S&P futures remain a bit un-commital up here, the weekly heavy line is at 1203 and the key pivot now has moved up to 1203.50, under here buystalk shuts off and gives way back to the bearish mode that the weekly “heavy” overlay has had on the futures. The chart below shows the deal. Usually when we have dueling forces, it can be “jail” till it sorts itself out, and that is a bit of what w have been doing or gigesting you might say. This morning the Euro popped and so did the equitues, and since that jolt, they seem to have a bid to it, not heavy but a bid. I would use 1209.00 down to 1208.00 as the warning track, where if under 08 then we give that key pivot a check. Above 1209.50 and we are eligible for updrafts. 1214.50 is the first resistance, but above there it is a matter of clearing 1217.75, above there and you have to respect the upside action. We will remain in buystalk up there, and the trending higher can begin to take hold, above 1223.00 and we should build on ourselves upward. So above 1217.75 and we start to roll up hill.

The S&P opened and moved up to a new high reach of 1230.75 last night, however once Europe opened and held far a bit, and then as morning has approached, we have eroded back downward, seeking this initial support area of 1216-1217. There is the .382 retracement level of 1213.25, and this may be support, keeping alive the magnet at 1216.00. Below here and we may seek out a test of 1208, but more importantly the 1203.50 to 1204 area, this is the last support before we throw in the towel, and go with the downside action. Initially however there is a light buoy action up to 1221.00, and
another at 1216-17, so the road lower from this area begins to get a bit tougher, however we are way over due for a meaningful pullback, and have to be sensitive for that action. On the upside, we look upward with possible intentions of more extension if we are above 1225.50. This puts the high in our target, and a new high implies we may go for 1240.50.

The S&P is somewhat uncomplicated today. We traveled yesterday up to the double-top area of 1114.50, besting it of course with a 1216 print, but it was not there long, and went on the defensive fairly quickly. Knowing we have the 1199.25 “heavy” weekly line also as a factor, the market has behaved basically right with the technicals. The interpretation part of this scene is to judge whether we are rebuked from this heavy line now, or do we come back up and stay persistent about getting back above that line, that will reveal the markets strength and attitude up here. This morning it is all about 1196.50 where resistance starts, and then the resistance at 1198 to 1199.25, and can we break through and “hold” above there, not print a couple of handles through and then failure back down, but can we hold the 12 handle. If we do not make a play on this upside barrier, support begins at 1188.50. Under 1186.50 breathes some vulnerability into the game, and 1181.50 is the next test. Note the fixed income is collecting itself sideways down here, and may try to make a demonstrative move back up, and if that is the case, the futures on this side should be continuing lower, I forgot to mention, the daily has gone into buystalk mode today, implying upward trend, or an exhaustive state starting to settle in. The chart below shows the look.

This time overnight it was Europe that gave us the blast up, after the post close trade yesterday had dragged us down a bit on rumbles of earnings. So the leaders on the way up, have reassumed that role once again. The S&P has come up above the “heavy” weekly line that lies across the path at 1199.25, check out the chart below. That is the level I will focus on today and the next couple of sessions, expecting to see a “top-out” somewhere above here now and then a well needed retracement run. In a broad sense, 1189.50 is the first magnet, and then the next would be 1157.25. This morning, we have 1203.50 as resistance, then 1206 and 1208, but above there and we may look for 1214.50 which is a
double top we formed the last time up here. Above 1214.50 and we begin to break away from the “heavy” line. We have to respect this upward momentum, and having this heavy number may turn you around looking for the short side, while the upward action is just plain unfinished. Just be informed that “technically” we are on borrowed real estate above the heavy line, and if we get “fixed” income to bottom or the Euro starts to top out, these could be signals that the heavy may begin to take effect. Note if we get under 1192.25, that level could act as a bear trap, and close the door on the futures at that point, and under 1188 would confirm. Note if you look at the weekly chart below, the last down Pivod histogram allowed a 15 point move through and then failed, and the second time was 30 handles and then a failure, so we have to allow some room on this heavy signal.

The S&P futures await the jobs report out this morning, and into it, the futures have not backed off much, however the high volume area in this neighborhood is 1157.25, and after an 1160.25 high, we are parked just under the magnet waiting the release. If you want to park some orders in the book, I recommend 1133.50 for a bid, and 1189.50 or 1200 for offers. This morning the line that has contained basically the entire rally up from 72.50 is at 1152-53. We need to park under there to show that the top is in for now, and we see what type of veracity this pullback has. Most likely the number will shake things up enough that these levels may be somewhat irrelevant and we have to wait till the dust settles to get a feel. There is support down to the 1148 area however that could buoy things if we don’t go crazy, but 1152 is the pivot area, and do we come back and get back above there will be the question. On the upside, the weekly chart below shows how there is no 1200 handle available technically, so the upside begins to close down if we get a “pop” off the number, 1189.50 being the main magnet, and the heat gets turned up hard above there.

The S&P futures put in a 1068 low, 122 handles below our “top-out” at 1190 just 6 sessions ago, then caught fire and has rallied 40 plus handles into this morning. Europe who weeks ago was the leader to the downside, had no problem maintaining this rally for in the last few sessions they have been “technically” the more bullish indicis, so no sell-off out of them. So for today’s session the question is how far does the momentum carry. We just saw 1124.75, and over night we have built up support at 1121.00 to 1122.75. If under here then we are vulnerable for a trip to the 1107.50 area, which is
the dividing line for today, for below there and we are on the defensive again. The upside has its first meaningful test at
1129.00, the ½ way back to the 1190 previous high. Above here and the key levels begin to come in view, beginning with
1133.00-1133.50, above there and we spark some interest to 1136.75. If above there it looks like the key pivot today is at 1138.25, this is where sellstalk shuts off, and technically we look upward to the daily resistance line at 1143.50. A close above there today and the tone is bullish, the sell-off is over. I am not expecting all of that action to the upside, however at the moment, we have seen no signs of stopping. Input wise the fixed income is selling off, which fits for a stronger spoo, however for the Euro to have a positive effect the futures need to be above *133.56 / (below 79.07 in the $ index).

The S&P futures remain weak overnight however in reflection, there seems to be this strength underneath the market that may show up again today or may not. There were at least 3 times yesterday where there was an aggressive ambition to the upside, posting 1107-1106-1106.75 highs, and then when that subsides, the market just conforms back to the technicals posture which is extremely weak. The Fixed income having such a strong rally also adds to the sell-off, however I am expecting those markets to become very volatile due to the Twist and the Chinese who are going to “mess” with the whole process now due to their dissatisfaction with U.S. behavior. The implicit thought is the 30yr should remain firm, implying stocks weakness, however, with the underlying support that comes in this equity market, coupled with a possibly not so obvious movement in the fixed market, and we could get a rally going. Technically though the head wind is down, and pullbacks are going to be met with resistance. A relief rally could target the 1092.00 “magnet”, and that be our mainstay as far as the area we hang around if the downside march does subside. 1081.00 is the first hurdle, and then 1084.00 which could act like a “bull” trap if we elevate above. There is a heavy effect though that begins around 1084 through the 1092 area, and that path will take some effort to overcome those obsticles.