The SP500 appears to have completed its pull back by dipping down to test the level near 1300. It has moved back above the 20 EMA and 50 SMA after it has dipped down to 1302 on an intraday basis. When the SP500 breaks above the 1322 level, which could be the signal it is ready to move to a new high above 1344.
The picture for the Nasdaq 100 is slightly different from the SP500. The Nasdaq 100 is still being drag down by AAPL and GOOG. Next week AAPL will be reporting its earnings, and that will probably create some volatility to pull the Nasdaq 100 down to the 2270 region. The semiconductor sector that has been contributing to the weakness in the Nasdaq 100 has turned to mixed. This could also be a sign that the Nasdaq 100 is also getting ready to move to higher level soon.
Although things are looking a bit more positive, but key support levels still need to be watched carefully in case some unexpected event or earnings surprises shake the market one more time before it resume its ascend. While waiting for the market to firm up once again toward the upside, I won’t be shorting this market. Instead, I will start identifying potential longs for the next up move.
