The broad benchmark S&P 500 rallied to a new 52 Week High and close the session in an extreme bias the buy side.

The rally started in the overnight session with the S&P June futures trading up to the psychology 1200 price level. The price pulled back off the overnight Globex high trading down4 points to 1196.

The buying response at 1196 was observable as price moved up off the low and traded above the A-period high to a new high at 1202, following which there was a minor pull-back to 1200. Statistical high volume was transacted with the 2 points range. The order flow indicated the executions were computer generated multi-scale machine code algorithm as discussed in Sunday’s Weekly Review.

The algorithm continued to execute with a bullish bias, i.e. responsive buying absorbing supply on the down tick. The minor pull-back were micro periods where the initiated selling that would appear at each probe to a new high would convert to long as buying interest continue to initialed.

Demand dominated supply continuously. During M-period price traded up to a higher high, extending the daily range by 3 points.

The buying interested was attributed to positive quarterly results from a couple of key industry players and some strong consumer spending.

Tech bellwether Intel announced overnight that it has exceeded Wall Street’s consensus estimate: earnings of $0.43 per share on $10.3 billion in revenue to. Intel issued a strong positive guidance going forward into its second fiscal quarter.

The Philadelphia Semiconductor Index was up 4.3%, its best percentage gain in almost nine months, to a new 52-week high of its own.

JPM Chase beat the consensus estimates for its first quarter earnings of $0.74 per share and revenue of $28.2 billion. JPM posted their best single-session percentage gain in six months.

Bank of America reports Friday morning.
Collective strength among tech stocks and financial issues, which represent the two largest sectors by market weight in the S&P 500, helped push the S&P 500 through near-term resistance at 1200 all the way up to 1210 for the first time since September 2008.

Despite such an impressive feat, the market is both technically and fundamentally overbought and for correction. The market has advanced more than 15% from its February low and more than 80% since it set multiyear lows in March 2009.

The gains are certainly supported with data indicating broad based buying interest: the strongest bullish expression of conviction, “bid” the prices higher. Regardless what matrix you use, stocks are over brought. However, stocks can remain over brought for long periods of time.

Earnings have just started, earnings are positive; the merchandizing has just got under way.

On the Consumer side, CPI for March increased 0.1% month-over-month. That was in-line with expectations. Excluding food and energy, consumer prices were flat for the month, but the consensus had called for a 0.1% increase in core consumer prices.

Retail sales for March increased 1.6%, which exceeded the 1.2% increase that had been widely forecast.

Cool consumer prices and no mention of inflationary pressures in the latest Fed Beige Book left the dollar without much support, especially as participants showed less interest in defensive-oriented holdings. Instead, the buck fell to a 0.4% loss against competing currencies.

Fed Chairman Bernanke testified before the Joint Economic Committee today. Bernanke said he is particularly concerned about the fact that in March 44% of the unemployed had been without a job for six months or more, but offered no new position on Fed thinking.

Technical Reference Points for June S&P Futures Contract

Potential Next Up-side Trading Range

Resistance

1221, September 23, 2008 High

1207, April 14, 2010, a new 52 Week High

Support

1185, minor, March 13^th Low

1183, minor March 9^th Low

1173, March 7^th Low

1165, March 31^st Close

1155, near term support March 26 Daily Low

1148, Major Support March 22nd low, the FOMC Low

1136, March 15th Daily Low

1134, March 9th initiated buying M-period, March 10th Daily Low, March 11th Daily Low

1125, the upper parameter of the 3-day distribution, March 2nd thru March 4th

1116, the lower parameter of the 3-day distribution, March 2nd thru March 4th

1105, minor, once tested, the February 26th settlement, overnight low

1086, the February 25th daily low

1078, February 16th low and the upper limit of weeklong consolidation range

1044 February 5^th Correction Low [Cash Index]

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