12/18/2013

It appears that Bernanke's words erased all semblance of uncertainty today, despite the fact that they actually stated some sort of change in the QE program. The so-called taper talks have so far led to a good news is bad situation in which signs of economic weakness, i.e. reasons to continue the pace of QE, caused the markets to rally on impending liquidity. Today's reaction appears to suggest that all this market needed was a rough date and a number. 

In the last 2 hours of trading, the S&P 500 gained around 30 points, driving it up near the highs at 1810. Technically, the uptrend from October lows is offering support around 1783, but I don't see this dropping below the 1800 level this week. If, by some chance, it does roll over significantly, then we are looking at a potential triple top on the daily chart.

I think we can expect 1820 by Friday, as 10 points over the next couple of days is not impossible. Also, 1850-ish marks the top of the big, big monthly rising channel. 

S&P 500 Daily Chart

S&P 500 Monthly Chart