With IBM the stock that most affects the Dow, and Apple the stock that most affects the NASDAQ the negative earnings reaction in both are causing some pain in the indexes this AM. But as outlined a few weeks back, the S&P 500 has been dancing along the 13 day moving average this entire rally. As of today this MA has moved up to 1165.6 and thus far the index is holding that level just fine. Further S&P 1170 was a breakout level, and except for a head fake late last week below that level (which was "fixed" by a furious late day rally out of the blue) we are holding it for now.
As a side note - always trying to look ahead for any potential changes in direction, the S&P 500 peaked yesterday intraday within 1 point of the previous Wednesday high. If somehow the "QE2" rally ends, one could discuss a 'double top' - otherwise it's just a random piece of information that means nothing. Taking out S&P 1185.5 is now the next target for bulls.
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