Trend still intact

This is a 30 day S&P500 chart on 5 minute time frame. The green curve is 5 DMA. I have also included pieces from Google Finance and FINVIZ.com.

As you can see the recent rally is still intact. The market breadth was 76/16, which, though not as strong as 90/10, is still pretty good. You can also see that today the some cyclical sectors rallied, with transportation leading and technology and capital goods just behind it. NASDAQ composite outperformed both S&P and DJIA by a clear margin. Solar stocks (not shown here) just went through the roof on high volume, one quoted reason being Chinese subsidies announcement. Solars have been the laggards of the current rally but a number of them have been forming a cup bottom during this rally (Note to self: never underestimate cup bottom formation). And on the other hand financials didn't show their recent performance. How long this rally can last remains to be seen. Right now, which is around 1 AM PST, S&P futures are pointing to a slightly lower open, but this can change in a heartbeat. Majority of trader, who have held positions during this week will probably close them before leaving for the weekend, so a mild pullback is most likely.

Interesting reversal

This is 10 day $SPX chart on 5 minute timeframe. The green line is 5 DMA.

Today S&P broke both the lower trend line and the 5DMA before reversing course and finishing higher. Since trend lines are more of a guide than a rule written in stone, I would still consider the current trend intact. Notice that the 5DMA did flatten out. What remains to be seen is whether S&P can hold above both the trend line and the 5DMA.

Where is $SPX heading?

This is 60 day $SPX chart on 5 minute time frame. The green curve is 5 day moving average.

I wonder why the anchors on any business news channel keep repeating the index numbers and gains over and over again. I can read that off the screen, thank you, tell me something I don't know.

Anyhow, question is what can we expect from S&P 500 right now. The strength and breadth of today's action makes me think that this rally might last for a few days. After pushing through resistance around 804, the next stop seems to be around 870, where it could run into resistance.

I am watching to following to get a sense of what to expect:

1. Resistance levels
2. 5 day moving average
3. Trend line (the lower trend line after it broke the upper one)

Other indicators to watch are market breadth and volume.

If S&P pushes through 870 level, which is quite possible looking at the bearishness I noticed during the past couple of weeks, then the next stop is around 940. I expect S&P to lose steam somewhere between 870 and 940 and to start trading within this range. The uptrend can end fast if the earnings start coming below expectations.