Yesterday’s ugly close was swallowed up quickly with a gap and run higher in the markets and we now have important higher lows to measure the strength of the market against.  The day to day volatility keeps us on our toes, but the market is providing solid levels to measure risk against.  Near term the market is neutral but continues to improve slightly.

$SPY broke the 124.50 level but today it is back up through it and now yesterdays low will be important to hold going forward.  It is good to see  that this market held above the 10 & 20 day moving averages, but the 200 DMA (not shown) at 126.52 continues to prove troublesome to overcome.   Closing above it next week could provide a decent continuation higher.  You can also see the 5 DMA is acting as resistance today, a close above it today would be good to see.

$QQQ found support at the important 56.00 level, that will be the key area to continue to hold above.

$XLF 12.80 remains the big level and it held it perfectly.

$SMH is struggling with the 30.50 level and really looks like it needs to be back above ~31.00 to have much faith in upside.

click charts to enlarge