Mega Rally Continues Until This Point
The markets are continuing to surge higher today. The SPDR S&P 500 ETF (AMEX:SPY) is trading at $125.39, +1.42 (+1.15%). Optimism continues to grow stronger for a major bailout plan in Europe. In addition, extra positives today included a solid China PMI number, showing expansion and good earnings from stocks like Caterpillar Inc. (NYSE:CAT).
In the last three weeks, the S&P 500 has surged 16%. This massive move may continue just a little while longer. When analyzing the charts, the SPY is seen approaching the 200ma. This level sits at $127.50. It is likely the markets want to reach for that level. Once achieved, the probability of a pull back is very strong.
When analyzing the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ). A major double top is approaching at $60.00. This major double top should coincide with the SPY hitting the 200ma.
Earnings will continue this week. In addition, the world awaits an actual deal from Europe. Currently, the market is pricing in an amazing deal. With such a meteoric rise, intelligent traders are slightly worried that the actual deal may not be as good as what the market is hoping. This may create a sell the news mentality.