With another upside extension this morning, it is clear that the market is viewing the current situation with bullish sunglasses on. For instance, the market saw news that the GE credit rating was reduced, that Berkshire Hathaway’s rating was cut and that the biggest US creditor (the Chinese) feel compelled to warn the US to take special care of the Chinese assets invested in US Treasuries. The market also totally ignored an explosion in the ongoing claims data and that highlights the markets exclusive interest in the bullish items. Therefore, one has to assume that the upward momentum is set to extend, partly from its own momentum and partly because investors and analysts are spinning the headlines into positive outcomes. Clearly, seeing several key US banks report or simply allude to profitable monthly results, gives off the impression that there could be some light at the end of the tunnel. In fact, favorable news from Bank of America on earnings seems to have provided the market with its latest lift and unless something patently negative surfaces, the bulls look to try to control prices again this morning.
S&P 500: With the S&P managing a rise above the 750 level, that has caused the market to push the next resistance level up to the 775 level basis the June contract. The 30 year moving average in the June S&P is also seen up at 768.95 today and for the time being the bull camp has control and it could take a very discouraging headline flow just to derail the bullish sentiment in place this morning. Apparently seeing concern from the Chinese Premier on the safety of their investments in US Treasuries was even of little concern to the market this morning.
DOW: Like the rest of the market the Mini Dow has made another new high for the move and with the blue chip sector seemingly leading the rally at times on Thursday, it is possible that the June Mini Dow contract is poised for a rise toward the next resistance level on the charts of 7,184. At least in the early going today, critical support in the June Dow is seen at 7,080. For a while there was doubt whether there were any blue chip stocks left, but the resurgence of strength in a host of bellwether stocks this week seems to have produced a broad wave of fresh buying throughout the market.
NASDAQ: The June Nasdaq would seem to be poised to continue its recent pattern of gains in the early action today. With the Nasdaq the most oversold technically into the recent lows and several tech sector stocks seemingly capable of lifting the Index even further today, we see little resistance until 1174 and perhaps not until the even number zone of 1200. The failure to hold above critical pivot point support of 1158 early today could erode part of the bullishness in place this morning, but at least initially, the bull camp clearly has the edge.