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The stock market is showing some upside extension capacity in the early action today and that momentum is at least partially justified by favorable international economic readings from Germany and by the favorable NAHB housing Index readings from the prior trading session. Perhaps the market is also deriving some strength from the news that several US financial companies have applied to repay their TARP obligations. The market might also be getting fresh support from Home Depot earnings, which bested expectations and reaffirmed positive forward guidance. However, as in the Treasury market, the stock market will probably need to see something positive from the Housing starts and permits data due out later this morning. With a noted real estate guru Sam Zell, apparently predicting a bottoming of the US real estate market this summer, the bias toward the economy is improving on a number of fronts and unless the Housing stats get in the way of pre-existing good feelings, the bull track should extend today.

S&P 500: The 200 day moving average in the June S&P is seen up at 940.95 today but that moving average is falling at almost 200 points per day and that could put the market into a position to shift a long term down trend pattern back to the upside later in the week. Critical support in the June S&P is seen at 917.60 today with resistance seen up at 924.70.

DOW: Given the upward bias in the early going today, it is possible that the June Mini Dow will take out the May highs today in the wake of anything positive from the scheduled US data flow later this morning. Clearly the June Mini Dow has regained a critical pivot point support zone of 8,500 and that leaves near term resistance up at 8,570. The 200 day moving average in the June Mini Dow is seen at 8,805, but that moving average is falling at roughly 14 points per day and that could pave the way for an encounter with a key longer term moving average later this week.

NASDAQ: Unlike the Mini Dow, the June Nasdaq has already regained the 200 day moving average, with that level (1361.50) now considered to be important support. Near term upside targeting in the June Nasdaq is seen up at 1411.00.In order to expand upside momentum in the Nasdaq into the Wednesday action the market might have to see some favorable from HP earnings after the close today. With the Nasdaq seemingly becoming a leader of the market on the downside and the upside, the gains in the Nasdaq today could be somewhat surprising.

TODAY’S MARKET IDEAS: The bias is up perhaps sharply higher in the early scheduled numbers feed the bullish psychology.

This content originated from – The Hightower Report.