The positive data and news from Europe catapults markets today. SPX moved above the 1330.50 so it was off to the races, piercing up thru the formidable 1329-1333 resistance zone like it was not even there. A back kiss down to this zone should be in order moving forward. The SPX made a bee line to the 1344 gap fill, which appears to be offering up a temporary resistance ceiling.
US Dollar is testing that lower rail of the ascending triangle shown in the chart below so watch to see if that holds. The euro positive news bounces stocks due to the following asset relationship; euro up=dollar down=equities up=commodities up=treasuries down (yields up).
Keystone’s algorithm shows that volatility has dropped and moved back into the complacent bulls camp. Financials are the most impressive mover today, still perceived as bearish by the algorithm, but now only by pennies. If the XLF, now at 15.29, gains only two more pennies, to 15.31, the financial sector will turn bullish which in turn will add sustainability to the broad market upside move today. If the XLF stays under 15.31 today, this broad market move up is suspect.
Copper is weak today which would be uncharacteristic for a strong upside. Semiconductors are also surprisingly muted so watch these two sectors for clues.
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