Some Charts to Watch

The market is back to normal following the Greek debt swap… wasn’t the swap a partial default? I am sorry to keep confusing logic with the situation. That aside the markets are pushing back towards their previous highs and today I wanted to look at a couple of opportunities if they can follow through.

The first is the S&P 500 index. Found support near the 1340 level and bounced. Now we are looking for the move to follow through above the previous high and start the next leg of the previous trend. I wouldn’t be surprised to see the market consolidate near term before making the move, but regardless the move back above 1378 would be a positive short term for the index.

The Semiconductor index found support and bounced back to resistance at the 418 mark. Look for the index to make a move through this level and back towards the February high. This is a key sector for the broad markets. If the move fails and we retreat to the lows on Tuesday I would expect more consolidation for the broad markets overall.

The Energy sector has been in a uptrend, but the test of support broke the trendline this week. There was a bounce off support and we are looking to the upside to reestablish the previous trend. The leadership in the sector has played a key role in the move off the December lows for the broad markets. Watch for oil to test the highs near $110 short term.

The financials remain a key part of the trend and without strength in the sector the market will struggle to take the next leg higher. The chart shows the clear trading range over the last five weeks. The banks and brokers are the key to the move and both have settled in on analyst comments at the current levels. The outlook continues to bring into the question where profits will come from based on the current regulations and zero percent interest rates. Watch for a break above the 278 mark to take the next leg higher in the sector.

The markets are looking for the catalyst. The issues in Europe were a test for the markets early in the trading week, but that wasn’t enough to push the markets decidedly lower. The earnings got us to this level currently, but the economy is the key to the sustainability of the trend higher. Watch the charts and follow the trend.