Very bullish action

The most bullish event today was DMI turning green on daily charts for DOW and a little bit for SPX (I expect bulls to buy me a coffee for tomorrow by clicking on the adds!) Daily DMI turned negative at the end of April, around 1180, and it didn't turn green until today. This is very significant on long term. SPX is also "kissing" SMA50 for the first time since the end of April. It may be hard to believe but market is more bullish today at 1095 than was a month ago at 1120-1130 because all moving averages are going down (which is a bearish event by itself ) and are easier to cross.

Dow is the most bullish looking index right now but we know from previous experience we should put our bets on SPX since this index if more representative of the general market than Dow. With Intel results out the market doesn't have any reason not to go further up. Tomorrow we'll see the major battle at 1100-1105 then at SMA200 (1113)

With market above the downtrend line and daily DMI turning positive there is little chance that market will stop here. There are more ammunition for the bulls, RSI just turned bullish (above50) one more sign of the market's strength.

Volume was not spectacular but higher than the previous day.

I do expect market to go further up but not on a straight line, of course. It will be nice to see a retracement towards the downtrend line to get rid of the short term overbought condition then a push up above 1105. In the recent past, 1100 was the most important resistance level, bulls managed to pushed SPX above this level but they lost control in less than a week after that.

If you are a bear and don't trust this upward momentum don't gamble by guessing the top, wait to see the market moving down again before going short (watch DMI on 60 minutes charts to see if the move down is the beginning of  new trend or is just a down day inside a multi-days rally).

babaro