The Bullish Phases Are Back

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Prepared by Geoff Bysshe, President of MarketGauge, filling in for Mish until May 7th.

The Bullish Phases Are Back!

Solid bullish phases are now in place in SPY, QQQ, and DIA. The IWM also put in a nice solid day and closed over its 50 DMA for the first time this month. It's now in an unconfirmed bullish phase.

Yesterday I said the markets' tight range could push the market today and the direction was clearly up all day. The range expansion in the SPY and DIA caps off a rally of almost 400 Dow points from the Monday lows. Unless Friday's economic data is unexpectedly bullish the markets should take some time to rest.

S&P 500 (SPY) In a confirmed bull phase as of today. I'd look for support around 139.40, and resistance around 141.30. After the straight up move from the Monday lows, Friday would be a natural time to expect some profit taking.

Russell 2000 (IWM) The first close over the 50 DMA in a month, but not by much and the chart still looks heavy. Still below the trend line from the March highs so it still has some work to do.

Dow (DIA) A nice range expansion day. It is the closest of the market watch 4 to its March high. One good up day will push it to media grabbing multi-year highs. But it's also at the top of a parallel channel based on the 4/10 and 4/23 lows which suggests it may be running a little too far too fast. Should it reach the highs tomorrow expect major resistance, 132.70 area.

NASDAQ 100 (QQQ) Confirmed its bull phase and broke the trend line. Next significant hurdle is the 67.50 level. It was nice to see it rally despite AAPL's poor performance today.

GLD Yesterday's bounce from the lows of its base continued today, pushing it to a 9 day high and a close above its 20 DMA. It has only closed above its 20 DMA 3 times before today since its February highs, and every time it has immediately retreated to below the average the following day. Draw the trend line from the 4/9 highs, GLD won't make any progress to the upside without a good break of this line.

XLF (Financials) 15.51 was the high to break - it did by a hair and closed on it exactly. So it's at the top of a key and very well defined range. Volume was extremely light!

IBB (Biotechnology) Gapped up and stayed up, but couldn't take out the key 4/3 swing high at 125.26. A rest before breaking out would be best, but either way it is still one of the best looking industry group charts around.

SMH (Semiconductors) One of the biggest up days it has seen in months as it broke the key 34 level. Now it is sitting right below the 50 DMA and a lot of resistance.

XRT (Retail) A nice healthy confirmation of a bull phase. The 61.70 level is the next important level to clear.

IYT (Transportation) Draw the wedge on the daily chart from the lows in Feb. and the highs in March. One of the few indexes to go down today.

IYR (Real Estate) Yesterday's "very impressive breakout of the 52-week high area" continued higher in very orderly trade.

OIH (Oil Services) Moved higher but still below the 40.83 range high. Very light volume.

XLE (Energy) A convincing break over the high of its tight multi-week base at the 200 DMA. The 50 DMA at 72.50 are should be its next target.

TBT (Ultrashort Lehman 20+ Year Treasuries) Looks to be basing out with a floor in the 18.40 level which it tested again today.