S&P 500 Analysis for January 14, 2010

The SPY gapped higher and rallied up to the 5 day moving average near 114 before backing off and regaining its strength for a successful push through that level and reiterating the point that buyers are still in control. Bears may argue that the action is sloppy, but advancing stocks outnumbered decliners by a margin of 2243:794 on the NYSE Wednesday which shows the upside participation is broad based. We will now look to the 114.00-114.30 level to be support, followed by ~113.20 below that. The short term resistance is found near 115 and above that, the market should be above to continue up towards tomorrow’s R2 level at 115.88 and then 116.50 from September of 2008 which we observed last week.

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