The market has continued to consolidate higher this morning as it searches to test resistance at 1780-82.25. Yesterday's close was 1771.25, the market must hold this level and truly close above the pivot at 1775.75-1776.25 to keep sentiment positive.
The MAR14 E-mini S&P 500 is up 10.75 points to 1782, after recent corporate earnings reports, as well as an excellent reading on GDP, sparked investors to buy equities. 1775 is our key support level. Even with the second taper yesterday, the stocks are showing resilience, and climbing this morning.
Traders and investors alike should feel confident playing the support and resistance levels, and we are expecting a consolidation. The reality is that we are unlikely to see any big bets to make or break this market ahead of the Fed.
The MAR14 E-mini S&P 500 has hit another downside target/support level overnight of 1760, but then staged a powerful rally all the way to 1785. The market is now up 17 points, and looking to us at least that a bottom has been put in.
The S&P began pulling back from the highs yesterday for two taper related reasons. First the deal in Washington opens the door for a Fed taper next week. Second, the S&P gave a push toward highs early into Tuesday's session and set up a technical failure.
Today's Macro Theme Is "Good News Is Bad News" — Watch Today's Number For Direction: Equities played a game of Pac-Man yesterday and although making it tough to hold a position, the levels continue to work.
There remains a strong case to own gold based on fundamentals. Central banks continue to flood markets with liquidity and uncertainty continues to prevail worldwide. Yet the technicals tell a different story.