After a relentless two week rally, the S&P 500 finished off last week skimming along the 100 day moving average, and reaching old highs from late August, around 1225. The level is not so surprising - but the incredibly short duration to get there, from where the market sat just 1.75 weeks earlier is. There has been almost no relent to the move, and now we are approaching overbought levels.
Just above the 100 day is the very important 200 day moving average. One can see that in late July, once that level broke, it was a swan dive. In theory, after such a huge move, it would be very difficult to break through a key resistance area without at least some rest - but we've seen strange things the past few years, so anything is possible. Much like how we broke support at 1220 which led to an avalanche of sell orders (bulls throw in the towel) just two weeks ago, the opposite would happen on a break over that 200 day moving average for the bears. Which ironically, just might cause a selloff - we'll see how it plays out. Either way, after such a big move and with a key resistance area ahead, one would assume a more bidirectional market.
Europe remains Europe - the first key deadline for bazooka solutions is this Sunday, and then another comes November 4th. Obviously the market has been dominated by Europe for months.
The economic docket is light this week, and is dominated by reports on housing and inflation which the market has long ignored. A couple of regional Fed surveys might catch traders momentary interest. For now expectations have fallen so low for the economy that even meh data is making people happy.
Earnings season ratchets up this week, with a lot of the S&P 500 type of multinational companies reporting. This will give us something to look at other than Europe...