Markets started the week Monday behaving very nicely with both the Nasdaq and S&P 500 gaining ground to the tune of 1.3 and .9% respectively. Volume was subdued, dampening the move somewhat. The Dow was able to eke out a gain despite IBM declining more than 7%, responsible for 83 Dow points. Remember the index is price weighted, giving more credence to higher priced namesFor the S&P 500 it was its fourth consecutive close going out near highs for the session, bullish traits. It was however stopped right at its 200 day SMA, and tomorrow should prove to be an interesting day. Gains were broad based with all major sectors advancing, and the staples and utilities were among the winners. The consumer discretionary group was the best performer, with the XLY up 1.4%. Notice on its chart how the 62 level was a smart double bottom that held back on 4/15 (ironic that it was tax day) and both Wednesday and Thursday of last week. Top component DIS showed good manner last week with nice powerful bounces off the round 80 handle and retaking its 200 day SMA on Friday. The benchmarks do have the feel that the coast is now clear but I remain in the camp that we head lower as many charts just look broken. The best that can happen for the bulls is a nice many month consolidation period. The bears left the scene for a few days perhaps gorging themselves on some porridge. Think they are licking their bowls clean and its just a matter of time before they arrive back on the scene. Maybe a nice ramp up into the opening on AAPL (up 1% as of this writing), and a bearish sell off into the close.
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