The S&P 500 index rose 8.33 points, closed at 1178.1. U.S. stocks climbed for a fourth session Wednesday after upbeat earning results from several industry giants and signals from the Federal Reserve about more monetary easing in the near future. For real, the thought of a one (1) Trillion Dollar money printing rescue mission was simply irresistable to the Institutions, as they bid up stocks severely today.
Stocks settled north for the fourth straight session. Things continue to look great for the bulls, but there are always concerns. The continued relative weakness in financials and housing are big issues for me, but if those two areas can get things going, we could have a very nice end-of-year rally in store.
The psychological target of 1,200 is just 22 points away, the trend is up with volume increasing and breadth at solid pre-breakout levels. So the question is not whether we break to new highs, but when. With our indicators now at overbought levels, it is time to be sensitive to the possibility of a moderate reversal that could take prices back to the first line of support at S&P 500 1165-1170, and then into the support zone at 1155-1160.
New positions should be protected with tight stops since a reversal from the current area could be quick and brutal. Maintain some cash to take advantage of a pullback since any consolidation should be viewed as a buying opportunity.
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