\tStocks<\/h2>\n
\tS&P 500 futures are up more than 20 points. That’s more than enough to power the index out of the downward channel pattern on the daily chart I showed you last week. If the index can hold onto this morning’s gains, then it should easily close back above its 50-day moving average (MA) line (2358), and run toward the 2385 level.<\/p>\n
\tIt probably won’t be a straight shot higher, though. There are multiple levels of resistance overhead – any of which could stall the rally.<\/p>\n
\tTake a look at this 60-minute chart of the S&P 500…<\/p>\n
\t![\"\"](\"http:\/\/assets.jeffclarktrader.com\/ee-assets\/channels\/articles\/1.png\")
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\tThe red lines on the chart outline a large consolidating triangle pattern. The first resistance (the red line at the top of the triangle) is up around 2368. With the S&P futures up 20 points, the index will be challenging that resistance on the opening.<\/p>\n
\tThe next target lines up with the early-April high (the second blue line) at about 2376. If the S&P can get above those levels, the mid-March high at 2385 comes into play.<\/p>\n
\tWe’ll have to pay attention to technical indicators – like the McClellan Oscillators for the NASDAQ and NYSE – as the S&P approaches those resistance levels. If the technical indicators can avoid getting overbought, then we can expect the market to continue higher.<\/p>\n
\tOn the other hand, if the technical indicators stretch into extreme overbought territory as the S&P bumps into resistance, then be on the lookout for a reversal.<\/p>\n
\tGold and Gold Stocks<\/h2>\n
\tGold traded lower overnight – down almost $20 at one point. It has, however, bounced well off of the lows. <\/p>\n
\tFor the most part, gold stocks have been under-performing the metal lately. That’s a sign of caution. Also, the Commercial Trader net short interest is back over 200,000 contracts. That’s another caution sign.<\/p>\n
\tYou see, Commercial Traders are the “smart money” in gold. They have an uncanny ability to buy gold near the lows and short gold near the highs. A short interest of 200,000 contracts isn’t enough to sound the bearish alarms. But it’s a yellow light.<\/p>\n
\tMost of the charts in the gold sector don’t have tradable patterns yet either. So I wouldn’t mind seeing the sector pull back some over the next week or two and give us a better chance to buy.<\/p>\n
\tElsewhere<\/h2>\n
\tHigh Yield Bonds (HYG) continue to trade well. HYG looks like it’s breaking out of the ascending triangle pattern I showed you last Wednesday<\/a>. Here’s an updated chart…<\/p>\n \t \tHYG is a leading indicator for the stock market. So if HYG breaks out to the upside, then it supports a rally in the S&P 500 up to the 2385 level.<\/p>\n \tI’ll update regular readers on these trends throughout the day on Jeff Clark Direct<\/a><\/em>.<\/p>\n \tBest regards and good trading,<\/p>\n \t \tJeff Clark<\/p>\n![\"\"](\"http:\/\/assets.jeffclarktrader.com\/ee-assets\/channels\/articles\/2.png\")
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