Stock Market -- Short Term

Technical
The blow off trend from the April low of SPX 1542 has been broken, leaving the market
trying to build short term support around the 1650 level. The primary trend channel up
from the Nov. '12 low expanded earlier in the year and is now running SPX 1590 - 1660.
So, as of today, the SPX is still running right near the top of the channel and remains
extended despite the minor pull back over the past week or so. SPX Daily

The extended time period MACD has worked well in this cyclical bull to help determine
turning points in the market, but check out the whipsaw action in evidence since late Feb.
of this year as the market has continued to power ahead. The MACD is currently very
overbought and there is a suggestion it could roll over again. The better gauges in this
run have been the trend helpers such as the 10 and 25 day moving averages. Reading them
suggests the first step to a correcion would be for the 10 day m/a to break below the 25.
Then we would have to see if the market weakens enough to lead the 25 m/a to roll over.
As of today, the rally, although extended and overbought, is still intact.

Fundamental
There is way too much jibber - jabber from the Fed governors including some recent
semantic sleight of hand by cousin Benny himself. Continued slow economic and jobs
growth coupled with low inflation suggests the Fed, by its own criteria, should continue
its current QE program.

My weekly cyclical fundamental indicator (WCFI), after rising sharply over Dec. '12 -
Jan. '13, has not been able to sustain above levels reached in early Feb. The SPX has
run 10% higher since then, and with no material acceleration of the economy to report,
the bulls are running with the QE ball with a number of players figuring they have a
"lock" on further SPX gains since growth anemia is not seen as likely to threaten the QE
program while flat corporate profits are not a pressing issue yet.