With this talk of recapitalizing the banks, Greece's woes are a distant memory as are Italy, Spain, Portugal and Ireland. These issues should come to the forefront within the next few days again. The way to tell of this reemergence of fear is to simply look at the charts. As the S&P 500 runs into resistance at current levels, a pull back in the markets looms. The cause of that pull back will be European based. Watch this between Tuesday and Wednesday of this week. Keep in mind, the bond market is closed today. The bond market controls the stock market. In other words, when the cat is away, the mice will play. Thus a big light volume rally today on hopes and dreams.
Aside from Europe, this week also has some key Chinese data and U.S. earnings. Alcoa Inc. (NYSE:AA) reports earnings tomorrow after the close. In addition, later this week JPMorgan Chase & Co. (NYSE:JPM) and Google Inc. (NASDAQ:GOOG) report.
Do not get fooled with this big surge up. As much as I would like to believe the bottom is in, it is clearly not. The charts tell the true tale. The SPY resistance level is major from here on out until $120.00. Problems in Europe are not going to be solved as easily as recapitalizing the banks. In addition, a global slowdown is nailing China hard. This will have ripple effects throughout the entire world.
Take the seven day free trial to the Research Center and Intra Day Stock Chat. Join the elite group that has been correct on every move in the stock market, up and down. Profit from these moves by joining this group that is far superior to any institution. Join the pros, to profit with the pros.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
