The main reason I thought the market was moving lower was the completion of a head and shoulders formation which usually moves lower. However, this time prices moved sharply higher. My reasoning behind the downward call was also based on a declining MACD and RSI along with a simple belief that traders would want to start taking some profits from the rally. In reality, we're gotten better than expected economic and earnings news and (probably) some short covering driving the market higher. The SPYs have broken through the upper trendline and are now just below the 200 day EMA.
The QQQQs have also moved through upper resistance on strong volume with a big gap higher. This was largely the result of Intel's announcement today.
Prices on the IWM are still contained, but today they gapped higher on strong volume.
The transports are either in a triangle consolidation pattern or a downward sloping pennant pattern. Either way they are still contained for now.
So -- we have two indexes that have moved through upside resistance and two more that are still contained. In addition, the transports hasn't broken through upside resistance yet. I think this is key because we need people to start trading like we're going to move more stuff from point A to point B in order for the economy to start growing again.
