5mo high – SPX held 1,290 – Great action on improved volume – beat 5day average by 7% (10day by 30%)
SPX 1,300 now a short-term target (also a retracement level technically)
Dow momentarily traded above 12,500 early in day, but failed to hold. Some profit-taking late day as VWAP was hard to hold on SPX (don’t blame Inst selling after recent run).
Net net another win for bulls. Small short-covering on this move (mostly in Industrials), but real buying evident.
Banks on a tear – BAC up almost 6% and GS near par ($100) where it may meet some resistance
Overall the equity market is a little overbought here and we expect some consolidation. 1260-1280 should hold as support if they want to get above 1300 on the S&P 500 in coming weeks
Below please find a few charts to note:
Transports are breaking out…also see our Bucket 2 long position in FDX
Financials also looking much better…
The BKX bank index is at a key area of resistance
The hourly chart of Goldman Sachs (GS) shows it overcame resistance since late October. The stock is also near the $100 mark where it may encounter resistance and has a good gap below it. We will watch it closely for clues to the broader market