S&P 500 Morning Analysis 10/12/09

The SPY continues to stair-step higher and as long as the pattern of higher highs and higher lows continues the market should be considered innocent until proven guilty. Right now the market is trading at 107.86 which is the daily R2 level, and with 108 just above we cannot rule out the possibility of a breakout which would bring in long side participants and more short covering from the daily and weekly timeframes.