Market Gets Ready For Next Move

Pre-market futures are down a little on a bad Weekly Jobless Claims number, but traders appear to have priced in "nuclear implosion of employment" already, so they are content to trade back and forth in a perceived "fundamental zone." Because yesterday was a narrow range day, nothing has changed technically other than the Bulls continue to hold Monday's gap. I am re-posting the same two charts, the SPX and the SPY (I fixed the error on the SPY labeling). The same numbers and the same technical concepts are good for today just like yesterday.

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


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

The minor gap down this morning will still be in the three-day consolidation range. I would like to see the bullish candlestick continuation pattern on the market resolve itself to the upside today, otherwise I will be more suspect about a possible Island Reversal. In other words, the Bulls need to assert themselves again in the face of very bad news in order for the current swing to take another leg up and finish it's move. Because of the nature of the news, and because of the current pattern on the market, if the Bulls do push the SPX above 920, then the move to the 950 area could be pretty quick and pretty sharp. The same goes for an Island Reversal type of pattern or a failure of the gap on a drop below 875 - 880. A drop through those areas could lead to a quick sharp move down to the 845 area.

As always, we shall see.....

11:45 am MT: Intra-day Update: The market continues to hold the gap, which should be making the Bears more and more nervous about how things will go later today and tomorrow. The Pennant on the SPY is taking on more of a Nautical Pennant formation. How ever you want to look at it, it's holding high and tight, which is a good sign for the Bulls so far.....

Here is a daily chart of the SPY showing the Nautical Pennant:
(click on image to enlarge)

Here is a 60m chart of the SPY showing the consolidation channel:
(click on image to enlarge)


Here is a daily chart of the SPX showing a regular Pennant:
(click on image to enlarge)

I want to see a Goldilocks Consolidation, not too short, not too long.....If the market can make a push off of the intra-day bounce back and move above the highs of the day it might start shaking the Bears off the tree.