What appeared to be a breakdown of the $SPX last week, with the index hovering at the neckline of it's Head & Shoulder formation...rallied on the Meredith Whitney comments on CNBC. However is this really sustainable? We are set to get a number of market moving earnings reports over the next several days. Goldman is set to report before tomorrow's open and the stock is up 5% in after hours.
Getting back to Whitney's comments she set a target on GS of $168...however remained her bearish self forewarning that unemployment could rise to 13%!!!
Below I've highlighted several key technical indicators I track. Back in 2007/2008 there were early SELL signals and then a confirming SELL. We've recently gotten a early BUY signal in March and it maybe a few weeks until we see a BUY confirmation.
As most know the stock market is always 6 to 9 months ahead of an economic recovery. It continues to be uncertain about the jobless outlook. Talk of a second stimulus package by Laura Tyson spooked the markets last week. So one has to be suspect of today's rally. Believe me we could easily be down 200 point tomorrow. Also don't forget Friday is option expiration. I'm still looking at the necklines on some of the indexes chart patterns and on the $SPX my downside target of 825 to 850 remains and a break out over 950 would make me believe that this bull has further to go.
*click on chart to enlarge image
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