Consolidation Morning But Swing May Not Be Done

After a 300 point day Dow day yesterday, traders are set to pause this morning. However, the upswing may not be over just yet. The market continues to absorb bad news and basically swing back and forth in a valuation zone between the 8,000 and 9,000 area on the Dow - with extremes in the 7,500 area and the 9,500 area.

The "bad" news today is lowered earnings guidance from BRCM, DHR, FDX, and TXN. The "good" news continues to be the drop in oil prices (now in the $43's) and the drop in 30-year mortgage rates (low 5's). The market pretty much knows the good and bad right now and traders are simply pushing back and forth in technical swings.

Here is a chart of the Dow:
(click on image to enlarge)

You can see that the Dow is fighting with the resistance zone I drew out for you several days ago. If the Bulls win then it's off to the 9,400 - 9,600 area. Watch the gaps on the DIA and SPY, if those get imploded then the upswing is likely over.

Here is a chart of the Naz:
(click on image to enlarge)

You can see that the Naz wants to make a push to 1,600 but the Bulls will have to overcome the TXN and BRCM news this morning to do it. The same story goes for the Naz, if the Bulls win today then we will probably see 1,600. If they push it beyond 1,600 then it's off to 1,675. If the gap gets imploded below 1,500 then it's right back down to the low 1,400's.

It looks like the market is in the late stages of the current upswing. Certainly the Bulls will take a pause this morning, but they may try to make one more push before it's done. When the push comes, if the Bears slam it hard, then that's an early warning to watch out on any bullish calls.

We'll see who wins the battle between the Bull and Bears today.....