an tSionna {04.19.13}

Chart courtesy of FINVIZ.com.

We will have to see if the market can find support at the crossroads circled above which shows a confluence of the trendline that dates back to last November and support.  The S&P 500 is also sitting right on its 50 day moving average which is a gage watched by many market technicians.  Most of our indicators show stocks as still overbought although a bit less than they were a week ago.  Longer term, 67% of stocks are still trading above their 200 day moving averages.  While that indicator has declined from a high around 85% a month ago, it is typically still not trading at a level from which longer or intermediate term rallies commence.  

Earnings season's been so-so this week and the economic news hasn't been great.  The bombings in Boston certainly didn't help sentiment either.  I said recently that this week and next will go a long ways towards giving us some indication over direction these next few months.  So far from my perch that news hasn't been great, sort of blasé as a matter-of-fact.  Blasé may not move the needle higher as far as stock prices go.  My thoughts could change of course.  We've recently discussed here, here and here market seasonality.  One of the things we've noted in our last post about this was that with many market participants now recognizing these seasonal patterns  of weakness in the May-early fall time period, perhaps the direction of most pain would be for stocks to move higher.

That may of course be what happens.  If so then the trade of maximum pain would be for stocks to take out these resistance levels and then over the course of the next few weeks reverse and move higher.  The one thing to note though is that scenario needs some piece of good news.  Good news has been lacking short term here.  Time to see if the bulls can notch a save.

*Long ETFs related to the S&P 500 in client and personal accounts.