Excellent day yesterday with almost 40 points in profits. I would love to make 40 points ever month !!! just to show the magnitude of the day. Well for wednesday what do I think will play out?
Oil is now firmly over $100 and has been noted (blog entry)the third wave push towards $100 should stick. The danger for the economy is that $100 is no longer resistance but now support and inflation pressures should start to increase at a dramatic rate due to the increase prices of other commodities.
The FED would definitely have their hands tied with rates if inflation raises it ugly head. Higher rates and higher commodity prices will definitely not be good for the equity markets.
Technicals: The S&P should make a run @1396. I will analyze how we act around that number as we approach it, but a breach higher of it should watch for 1409 then 1425 which would ultimately be the heaviest resistance on the short time frame.
On the downside we have 1375 and then 1364 to watch. For today I am hoping for a gap down to absorb the movement yesterday and trend higher into the upward resistance numbers.
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