NEXT UP IS S&P 1360.......

The market has made a huge advance and up until today it wasn't the best type of advance due to the fact that the market was being led upward by the large caps with no real participation anywhere else. The Naz was moving up mostly because it was being dragged along by the move in the Dow. Not the type of behavior you really want to see. Today we saw something different. We saw the Naz leading the way even though the semi's didn't do a great job of participating. Very healthy although it was good to see the semi's finally pick up a bid late in the day. The key thing about today though was the breadth and volume across the board. This too had been lagging but today was clearly different as the volume surged higher and the breadth was outstanding. Volume on the NYSE was just under 3 billion and on the Naz it was 2.24 billion and this is confirming without doubt. In addition, the breadth readings we're truly great at 26/7 on the NYSE and 22/8 on the Naz.

Let's now take a look at where this move should stall for a little while if not somewhat longer, taking a well needed rest. The long term trend line channel on the S&P is at 1360, just 10 points from here. The Dow has blue sky here but the S&P will help the Dow take a well needed rest as well. The Naz has resistance up at 2300-2350 so although there's still more upside potential near term, this move is getting a bit winded.

Don't lose sight of what has been clear for a long time folks. The market likes the future. It likes that the fed is done raising rates. It knows the next move is a cut. It knows there will be many cuts in 2007. It also recognizes that the best days of the commodities are over and that lower prices are the overall trend there although there is a positive divergence now and higher prices are expected short term. This will eliminate inflation fears and raise earnings thus being bearish this market at this point in time simply won't work. Please keep 1360 on the S&P in mind very short term for strong resistance.

Peace Jack Steiman