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Post Market Analysis, Tuesday January 19

|Includes:DIA, IWM, QQQ, SPDR S&P 500 Trust ETF (SPY), XLF

 Today we saw a broad market rally, with all of the major indexes popping 1% or more. The TRIN, TRIN/Q, TICK, and TICK/Q all corroborated the bullish move quite nicely. The VIX only dropped about 2%, but it is well under 20 and we can't ask for much more right now.

SPY is in a high base formation on the daily charts and appears to be setting up for a breakout to new 52-week highs. It would be very bullish for SPY to break out above 115 and make a run to the 120 area, also testing the upper trend line of the rising wedge formation on the daily chart. Do not jump in early though. Wait for a confirmed break out above 115 and a close above 115.50 on the conservative side. SPY is sitting at resistance at 115 right now and can just as easily turn around and head lower.

Look out for Housing Starts data as well as the Producer Price Index tomorrow as they can be market movers, perhaps even a catalyst for a breakout. Check your Bloomberg Economic Calender for more details on those two economic reports.

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Happy Trading,

Jason

Stocks: SPY, DIA, QQQ, XLF, IWM