The stock market held its longer term support last week, and had a huge breakout Monday on heavy volume. A head and shoulders pattern began to develop in early May and this pattern could be in jeopardy of breaking if we continue higher. Today it will be important to see whether we hold above 91.00 in the SPYs, or if traders fade this gap up. Yesterday we opened up and closed near the highs of the day with Goldman Sachs (GS) crushing earnings expectations. Today we are opening up for the third straight day with Intel (INTC) posting better than expected profits. Many leading stocks, such as AAPL, GOOG, and BIDU, are poised to breakout of major resistance levels. Can the market make a lower high? Or is the bearish pattern going to change and break for a move higher. The market is still focusing on GS and a close above 152 would be constructive. Traders are watching closely for volume to come back into the market as this will determine a real direction. Intel will also be a catalyst for the market; if traders fade the open the market could swoon, but if it follows through higher we could have a major move.
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