Markets acquired new energy after improved sales reported by some chain stores. With consumer confidence surging to a 6-month high, the market appeared set for a lift-off. But the Commerce Department rained on the parade, releasing June retail sales figures down a disappointing 0.9%.

The Dow Jones Industrial Average broke out above its 10-week consolidation, signaling another primary advance and establishing a new, steeper trend channel. The primary trend is up, with support at 13200. A retracement or consolidation to test new support at 13700 is expected. Reversal below 13500 is unlikely and would warn of a bull trap.


The Dow Jones Transportation Average made a bullish breakout above 5300 accompanied by strong rises in Fedex and UPS. Reversal below 5000 is not expected and would signal trend weakness.

The Nasdaq Composite made an upward breakout from the ascending broadening wedge pattern, while Money Flow signals accumulation. Expect further gains. The primary trend remains upwards, with support at 2340 and 2500 (from 2525).

The S&P 500 broke through resistance at 1540, after a bullish failed down-swing, signaling another primary advance. Retracement (or consolidation) to test the new support level is likely. The primary trend remains up, with support at 1490.

LSE: United Kingdom
The FTSE 100 completed a bullish failed down-swing and is testing resistance at 6750. Breakout would signal an advance to the all-time high of 6900/7000 The primary up-trend continues, with support at 6000 and 6450.

Japan: Nikkei
The Nikkei 225 shows a bullish consolidation below resistance at 18300. The target for an upward breakout is 19800 (18200+[18200-16600]). A fall below 17900/18000 is not expected - and would warn of a test of primary support at 16600. The primary trend remains up.


China: Hang Seng & Shanghai
The Hang Seng index continues to accelerate, breaking through 23000 and converging with Shanghai which has been running ahead for some time.

ASX: Australia
The All Ordinaries is testing resistance at the top of the 10-week consolidation at the upper border of the trend channel. Upward breakout is likely after similar breakouts in US markets and would warn that the primary trend is accelerating - establishing a new trend channel drawn in light blue. Accelerating trends increase the risk of a blow-off (a sharp rise followed by an equally sharp fall). The primary trend remains up, with support at 5650 and 6000. A clear upward breakout would shift primary support to 6200.

The failed down-swing is bullish, signaling continuation of the up-trend, but this has been countered by a bearish gravestone candle on Friday. A fall below 6350 would signal a test of support at 6200, while respect of 6350 (or a rise above Friday's high) would indicate another rally

Nice run down on the low down, Cat
While I see the 5dMA support at 13700, I also have to look back at April when the last quarter earnings were reported and the 50dMA, that we just bounced off of a few times. I guess charts are like rochard ink blot tests...if your a bull, you see bullish indicators and I must be a bull
What I found interesting was that the last 400 points was driven by blue chip and tech (I know, I know...I bailed out of csco at least a buck and a half early :o). If we show indications that the rally isn't over, small and mid cap stocks, which are shorted more now than ever before in history, may join in the rally and short covering could drive us up even more.
About the only thing the bears have to clutch to is the subprime melt down and the banks are tired of lagging. They all report earnings next week and cramer expects them to come in strong and aggressively. I feel like the subprime has maybe been over factored in and we will indeed see a strong continuation next week. While june retail was down, it wasn't down as far as the street expected and was over factored also.

However, after all my ramblings, do you really think that the street could engineer an indicies wide bull trap?

We got the expected today, adjusted for the week, but it did close right at the 5dMA support line, which I think is healthy profit taking plus it leveled out the RSI a bit.
more banking and tech earnings tomorrow could drive us back up and over the top for that illusive 14k close