SPY April 24 2013

SPY April 24 2013 with candlesticks

With a very tight range, today's action was a consolidation day. The urge to take profits must have been intense for some traders, and there was weak economic data in the morning that gave them the perfect excuse. There were many weak earnings reports to digest, especially the so-so AAPL report that could have rocked the market. However, the averages held on and even showed signs of strength at various points during the day when they easily could have rolled over instead.

The controlling chart patterns aren't clear yet: head and shoulders, Bull Flag, uptrend channel, Doji Evening Star. The next move, higher or lower, will do a lot to establish which chart patterns are in control. For now, we simply play the uptrend channel as normal.

Below is an Ichimoku chart that does a good job of showing the support that exists right below the uptrend channel. For those unfamiliar with these charts, the main cloud is that dirty looking area right under the uptrend channel:

SPY April 24 2013 Ichimoku chart

Today's advance was led by Industrials, materials, finance and retail. The other sectors that had been leading took a break, causing some sector rotation. There doesn't seem anything particularly ominous about that.

The below SPY chart also has something interesting going on:

SPY April 24 2013 showing SARS Parabolic lines

We have gotten back over the Parabolic SARS line that SPY was riding for much of the uptrend. Staying above it today was a good sign for Bulls. It may mean little in the long run, but it does help show that things are back as they were before the little correction of last week.