Market Is Ready for a Move, But in Which Direction?

| About: SPDR S&P (SPY)
This article is now exclusive for PRO subscribers.

With the close of the quarter, investors are now on the verge or earnings season, where we shall see if expectations of the market for a discernible improvement in business activity is justified. The charts seem poised to move +/-10% in either direction.

Interpretation 1:

Interpretation 2:

One could also make the case that we are in a sideways consolidation, that this is the “correction,” and that a break out of the 93 to 96 level, the SPY should advance as high as 106.

I tend to lean on the bearish side for various reasons.

  • The large run up on low volume leaves markets due for a correction.
  • Very little room for error in terms of upcoming expectations, I’m getting a “buy the rumor sell the news” feeling.
  • The 15/30 SMA have been very predictive this past year, and has just crossed to the down side.

Either way, the market looks like it is about to move 10% in either direction, earnings will undoubtedly be the catalyst.

Disclosure: Short SPY