The Confirmed Bullish Phase Shows Off Its Influence

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Tuesday was perfect example of pre-holiday bullish drift. Very often the market will move effortlessly higher leading in to a holiday. In bear markets you get the opposite effect. Don't be fooled, the bulls don't have it this easy going forward.

Thursday and Friday will be completely focused on jobs data which could move the markets dramatically. After such a big move off of last Thursday's lows I'd tend to believe that good news keeps the markets up, but doesn't lead to a substantial advance. On the other hand, bad news will lead to a significant test of the support levels mentioned below.

S&P 500 (SPY) There is a pretty clear path to 139.40, but that's a lot to ask for without a few pauses. Look for resistance at 138, 138.60, and 139. It would be healthier to test some support and consolidate first, and support levels to watch are the 136.30 and then 135.80. If the bulls are really strong it will hold its pivot around 137.

Russell 2000 (IWM) The biggest percent mover of the market watch 4 again by a long shot. This action is too "far to fast", but until it reverses don't fight it. The next level of resistance is 82.50. Support is 80.50 down to Tuesday's low of 80.43. The next level after than is 79.20.

Dow (DIA) Just poked its head over the June highs. Now, any trading below Tuesday low, 128.24, would be a warning sign of trouble. Until then look for it to hold 128.70, and find resistance at 131.20-.40.

NASDAQ 100 (QQQ) Like the DIA it finally cleared the June highs, and as a result, a quick reversal below the Tuesday low, 64.29, would be negative, but until then look for it to hold 64.40 and find resistance at 65.04, 65.83 and 66.18.

ETFs:
GLD Gapped over the 50 DMA, but it has not been able to continue beyond the 50 DMA in its last two attempts. It needs to close over 158.40 to prove its bullish strength.

SLV Monday proved to be an inflection point and the gap higher today makes the 6/28 low look like a beautiful long-term double bottom. However, even if that proves to be the case, there's more work to be done on the upside. 28 is a big resistance area, 26.90 is the big support that the bulls should hold. And a weekly close above 27 would represent the first close above the prior week's high since the Feb. 2012 highs!

XLF (Financials) slow and steady climb. 15 is a MASSIVE inflection point based on swings , and the trend line from the 2012 highs comes in around there too.  If you like trend lines, draw the support line from the Oct. 2011 lows. Today is the first close back over it. When it falls back down look for support at 14.60 and 14.50.

IBB (Biotechnology) I'd like to be taking the drugs this ETF is on! Up nearly 7.5% since last Thursday's lows and this is at all time highs, not recovering from a crash. Just watch for a pull back, and trade stocks in the group.

SMH (Semiconductors) Yesterday was the inside day on a death cross. Today nudged higher but not beyond the outside day of the pattern. Subs: watch this along with the semiconductor stocks on the Evening Watch closely! Key levels in SMH are 33 and 31.60.

XRT (Retail) Tried to clear 60 but 60.10 held it in. Breaking 60.10 could lead to a nice leg up, but consolidation first would make for a better long trade setup. Look for support at 58.90, and consolidation before trusting the now confirmed Bullish Phase

IYT (Transportation) Subs: Still long for swing from 90.05. Inside day on a big up day in the markets. 91.60 is the key support, and 95 is the big resistance level.
IYR (Real Estate) Reached a 3-year high today. Very impressive, but unless it is taking IBB's meds - it needs a rest.Wait for a set up.

USO (US Oil Fund) In May and June oil experienced the most viscous decline in nearly 10 years so it's no surprise that the snap back has been this impressive. Today's 4.5% move, mostly on a gap, should be watched closely. But wait for a set up. If you want to be bullish on stocks, then you want oil to stabilize which would suggest the world will show some economic demand. But now a trade back to 30.50 would still be considered a health pull back to me. That's also a nice move even for a short trade! 34 is major resistance, a reversal below a prior day's low should get your attention as the trend is still down.

OIH (Oil Services) Draw the support line from the July 2009 swing low on a weekly chart and you'll see why it's more than just USO's bounce that should have you looking for a bottom here. Today's the first close over the 50 DMA in 4 months and the slope is quite negative so expect a pull back. Then we'll see what the bottom looks like.

XLE (Energy) Yesterday I wrote "A break over 66.70, it could run to 68.70 quickly". Today's high = 68.70. I didn't expect it in one day, but I hope reading this teaches you how I saw the levels! Look at the weekly chart and draw the trend line from the 2009 lows to the 2010 lows and you'll see what's happening. The 200 DMA is holding it in now so we'll look for a pullback pattern to enter safely in this new Accumulation Phase.

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