S&P 500 Weekend Update: Market Anticipation High

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As we head into another weekend of “As Europe Turns,” the markets are brimming with hope and optimism.  As I type, the S&P 500 is up over 1% for the week, and more importantly, up over 2.5% from Turnaround Tuesday’s low.

Dancing in and around a key technical level (1340), the index is setting itself up for a Monday morning showdown.
Investors and the media are keenly aware of this dynamic and buzzing about all the possibilities: Will Sunday’s elections in Greece bring good news?  If not, will Europe and/or central banks act aggressively to save the markets? Or better yet, do Sunday’s elections in Greece matter?
Yes, it will be a weekend full of intrigue as we prepare ourselves for Sunday’s futures.
So, what are the technicals saying?  Well, in short, a sustained break out of the 1300-1340 range would likely target 1360 on the daily chart. Above that and its 1375. On the weekly chart, the index recorded a DeMark buy setup last week, which affords for a 1-4 bar reactionary period (this week being week 1).
What’s interesting about this setup is that much of the reaction occurred during week 9 and carried over into this week, leaving me to wonder how much juice the market will have beyond next week. It is also noteworthy that we have yet to see confirmation from the weekly MACD, as it hasn’t crossed up through the signal line… yet.
In short, we are in a rally phase. So watch closely for follow through on the daily chart and confirmation on the weekly chart. But if Europe coughs, who knows! See annotated daily and weekly charts below.
S&P 500 Daily Chart:

S&P 500 Weekly Chart:

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