SPDR S&P 500 ETF (NYSE:SPY) dropped sharply early in the morning on the back of a downgrade of Greek debt and earnings from eBay Inc. (NASDAQ:EBAY) that surprised the market on their negativity. However, like so many other days in the last few months, the markets just will not stay down. Again, the credit must be given to the bulls as the market has reversed coming up underneath gap fill on the SPY. This will be a significant resistance level and may work as a solid shorting opportunity for a short term intra day trade.

The bears continue to get smoked as every significant attempt at a drop gets thrown in their faces with a late day light volume rally. The culprit aside from light volume seems to be the dollar. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) is trading just slightly off the lows of the day after falling in the last hour. Notice how the markets have jumped to the highs of the day and to gap fill.

The markets await Amazon.com, Inc. (NASDAQ:AMZN) earnings after the close today. Amazon is strong today, higher by 2.00%. I expect earnings to be in the range of $0.70 to $0.75 per share. If earnings come in this range, and the future outlook is improved, Amazon may be able to trade higher. If it comes in lower, the stock may fall sharply after the recent run up. Watch for comments on the Kindle and sales projections. With Apple and the IPAD as a major competitor, people may assume sales of the Kindle will fall sharply.

Gareth Soloway
Chief Market Strategist

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