Today, Tomorrow, and the Next

• Wednesday, Fed day, the S&P put in a misplaced topping candle, which is a bullish candle when located near the bottom of an extended selloff.
• For tomorrow, StockTock is calling for a bounce in the markets. Here are the important events to look out for:
  • 8:30am ~ Final Q1 Annualized GDP (last 0.9%)
  • 8:30am ~ Initial Jobless Claims (last 381K), Continuing Claims (last 3.06M)
  • 10:00am ~ May Existing Home Sales (last 4.89M)
  • 10:30am ~ Natural Gas Inventories
• StockTock has been calling for a rally after Wednesday’s Fed meeting.
• SPX Key Support Levels
  • 1315.25 ~ Lows from Friday and Monday
  • 1298.40 ~ Close on March 19
  • 1275ish ~ Bear Stern’s Close
• SPX Key Resistance Levels
  • 1327 ~ 61.8% Fibonacci Retracement
  • 1335 ~ Support in previous range
  • 1351 ~ Support for previous M pattern
  • 1370 ~ Resistance in previous range

Over the Next Week or Two

• We are calling for a bounce over the next couple of weeks.
• The pending rally will test and likely break above the 1370 resistance level, allowing for a push towards 1405 and then possibly 1440.
• The pending rally will likely be led by technology stocks, which have strong relative strength.

After That

• The stock market is in a Bear Market.
• It is difficult to say how long the pending rally will last. As the charts fill out, we will update the outlook appropriately. Credit market concerns have not gone away and high energy prices are a long-term issue for the economy.
• A summer rally will fulfill a WV pattern on the weekly chart of the S&P. This rally may take the S&P above the 1440 level.
• There is still a chance that the WV pattern cracks and takes the market to new lows. This would require a major negative catalyst out of the financial sector, perhaps a bank failure and/or freezing of credit.

The Market Outlook changes each day as the charts fill out and provide more clarity.