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Economic Reports Due out (Times are EST): Jobless Claims (8:30am), Producer Price Index, Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Bloomberg Consumer comfort index (9:45am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am)

Premarket Update (Updated 8:30am eastern):

  • US Futures are looking at a slightly higher open.
  • Asian markets had a descent day, with about 0.5% in average returns. 
  • European markets are trading mixed/flat. 

Technical Outlook (S&P):

  • For the market not to give up more gains than it did yesterday after 5 straight days of gains, in which the 5th day had a resounding spike higher, was a strong indication that this market is trying to take a breather and possibly consolidate for a while before making another push higher. 
  • For the bulls though, it needs to make a much stronger higher-high from its previous one, just to maintain a healthy channel, because when the depth of the higher-highs dwindle, the market begins to exhaust itself as well. 
  • Volume remained slightly above recent averages. 
  • Short-term the market is back in the overbought territory. 
  • Price-level resistance can be found at 1428, and of course psychologically 1400 will be a test for the bulls as most milestone figures are. 
  • Nearest support level for the S&P lies around 1356 – nothing really nearby. 

My Opinions:

  • Looking back at recent history, when we got these major breakout rallies to new highs, we’ve seen at least 1-2 weeks consolidation – which wouldn’t surprise me (wouldn’t surprise me either if we ripped to infinity and beyond at this point) considering how far removed we are from any significant support levels. 
  • While I believe that this market is rising on pure government fluff and is ultimately unsustainable, trying to get in front of it to the short-side at this point is ill-advised. 
  • Bearish arguements for a market pullback got anihilated Tuesday with the cosmic rally that took place. 
  • The market tends to rally on strength in the Euro, but when the Euro is selling off, the market has ignored the action. 

Chart:

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