The charts we drew up over the weekend were showing one last possible push to the upper channels. The market got some great headline news over the weekend and ahead of the bell that has helped the bulls push resistance and fresh highs.
We also gave you some price targets to watch for and they have come into play and once again the close will be important. We doubt the bulls’ give up all of their gains and there could be a continued push higher but it is still too early to tell if there will be a breakout to new all-time highs.
We mentioned the positive developments over the weekend concerning Syria but the bulls also got a lift when Larry Summers withdrew his name for Obama’s handpicked Fed Chairman. The water-cooler talk was that the White House would announce him as the next Fed Head as early as this week but by taking his name out of the hat, it now appears Janet Yellen will get the nod.
Wall Street and much of Washington were dreading a possible Fed run Larry as he is seen as a loose-talking cannon and not as QE friendly as Big Ben. With this rain cloud being lifted, the uncertainty is now certain that Yellen will be the new sheriff in town.
The Dow is up 150 points to 15,526 while the S&P 500 is higher by 14 points to 1,702. The Nasdaq is advancing 6 points to 3,728 and the Russell 2000 is gaining 7 points to 1,061. The S&P 500 Volatility Index ($VIX, 13.94, down 0.24) has traded higher and reached 14.49 but is trending towards our 13.50 target.
We have been busy this morning with our research and we are in the process of updating our Watch List as we get ready for some action this week. We still have a few trades we are winding down and we have started a few positions over the last week or two but we have plenty of room to play a continued breakout or an upcoming decline if resistance at the top holds.
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