I look at the S&P500 like most people do: as one of the better gauges of the health of the US equities market. It represents 500 of the larger companies in the United States.
Futures are up this morning so let’s take a look at some important levels. In this case, let’s keep the ETF theme going and take a look at $SPY. On February 18th, $SPY hit 134 intraday but could not close above it. Yesterday, $SPY hit 134 but could not close above it. This morning it looks like test #3 is in the works.
I would like to see consecutive closes above 134 as confirmation for a move higher in Large-Cap stocks. $IWM (Small-caps) and $MDY (Mid-caps) are already making new highs and that is a good sign. Unfortunately RSI (Relative Strength Indicator) is making lower highs in the S&P500 so we need to watch that for a break above 70 to look more positive.
Remember today is Friday and funny things tend to happen between Fridays and Monday mornings so we’ll grab a few salt packets with today’s market action.