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The markets jumped higher today, one day after a big drop that saw the entire Dow Jones Industrial 14,000 move from Friday wiped out. The stock market seems unsure as to the direction they want to head. After Friday's move above 14,000 on the Dow, the media pumped like crazy, only to see the markets collapse yesterday. Now the markets appear to be heading right back to the 52 week highs.

So what does this mean? The answer is simple. It is all about where the markets close today. On the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), if they can negate 100% of the drop from yesterday, a bullish bias must resume. If they close higher but under the gap fill level, a neutral bias should be taken and all eyes need to watch the action tomorrow. Lastly, while unlikely, if the markets sell off into the end of the day and close flat to lower, a negative bias would continue.

Gareth Soloway


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