The market turned in a relatively predictable performance last (holiday shortened) week as silicon and carbon footprinted creatures both decided to student body right once more, after student body left"ing" for 2 weeks.   Risk on; risk off.  Wax on; wax off.  Whatever you want to call it in the most highly correlated market (and increasingly so) we've ever seen.  While many of the gains came in last half hour salvos the charts don't care how it is done; they just register the movement - so we seem to be back to the post 3:15-3:30 PM rally days of old.  The market has been feasting on premarket magic for much of the past 9 months, so this change to the 3:30 PM rally bring back memories of summer/fall 2009.  The market where almost all the gains are in the premarket OR in the closing 30ish minutes have been hallmarks of the move from March 2009; rendering much of the rest of the day somewhat moot.

I submitted last week that a move to S&P 1040 should be the minimum and if the 'action' is good more good be in store, certainly there was room for a run all the way to S&P 1100"ish".  1070 was the only key rest stop in between.  Both 1040 and 1070 were captured by end of week.  I am going to show below 2 separate charts of the S&P 500, one with the exponential moving averages and one with the simple; in the past two months the simple moving averages have seemed to held more sway.

Long story short, if you are not a daytrader or someone trying to turn on a dime simply be aware that S&P "1094 to 1100" is the key area ahead.  If these levels are achieved, the next objective are mid June highs of S&P 1130.  The market has been making a series of lower highs so surpassing 1130 would be a key achievement; something to keep in mind if and when.  Certainly probability says the indexes are rejected at the stone wall of 50/200 day, but historical references have been failing often the past year and a half, so open to any possibility.

Aside from the general market there are many items at critical junctures - many having accomplished their cursory dead cat bounce from oversold levels and now reaching some resistance areas.   I could post 100s of similar charts, but let's look at two key ETFs.  Remember in this day and age of HAL9000 every stock in an ETF is the same stock... with hedgies piling in and out of ETFs as their weapon of choice, every underlying stock will go up or down - hence feeding the student body left cheer.

The Euro and dollar continued their "Trading Places" characters - some resting on both late last week but both seem to be resting before continuing their new roles.  If so, a lot of "Euro to par" folks are going to be feeling foolish - at least near term.  A move in the dollar index over 85 would be key for the bulls to get their footing back.  Remeber, these currencies are *not* supposed to move with this sort of velocity ... but just another risk asset for HAL9000 to "wax on, wax off" with.

As I've been saying for about a month now, this is yet another easy year over year comparison (the last "very easy one") and the whole game on Wall Street is for execs to promise low, and beat.  (Alcoa being the exception as their execs find a way to miss 99 out of every 100 quarters). Analysts are happy to go along so their firm can win investment banking business and we all clap along in awe as we are "shocked" at the earnings beats!  Oooh! Ahh!  You mean the CFO winked at your earnings model estimates as "ok" and then they beat said estimates by 4 cents, goodness - what are the chances?  Get the seals clapping on CNBC - more estimates bested! The more important nuggets in these reports have nothing to do with the headlines, but since everyone needs to put in 5500 trades within 1.2 seconds of the headline hitting Reuters, only old fashioned people like me actually read reports anymore.  I'm a dinosaur and I still consider 3 seconds to be "long term".  

For the portfolio I had essentially lifted all shorts coming into the week but the market was in limbo under 1040.  I said I'd decide what to do (sell the long positions I had bought in the depths of despair last Thursday) when I saw how the market acted around 1040.  There was a naughty little reversal Tuesday, but the premarket magic and roaring day finally showed up Wednesday ... which was the day we made some serious hay with some intraday long index positions as well.   I did throw on a little short exposure later in the week but a pittance.  We're waiting to see some signals before making any serious next level moves; for now just riding the wave and taking profits along the way as we crest upward.