The market saw a nice rally Monday and opened up nicely today after very positive earnings for AAPL, CAT and others. We are seeing some weakness mainly due to the pullback in energy names as a result of the bounce in the dollar today. The EUR/USD has some good support here between 1.485 and 1.49 as the chart shows a nice uptrend line on the 60min chart going back to early September.
I would expect the SPX to hold the 1080 support zone which was previous resistance until it broke out last week. If it breaks then we will re-evaluate. But for now this is a pullback in a bull market. Say it slowly to yourself :)
Overall, I like the patterns still on the daily charts of oil and commodity stocks. We still have a lot of data and earnings here in the next few days so it will be volatile. Just know that the market will try to shake out the most people before it makes a move. New highs vs new lows are still increasing each week which is not a sign of a topping market. Before this market topped out in 07-08 we saw consecutive weeks of decreasing internals. Just be nimble and trade around core positions that you believe in until earnings wind down because it will be choppy and wild for now.
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