the approaching moments of truth: spx

i have to apoligize to my faithful readers - for a couple reasons i have not been posting as much as i would like to... for one, i have been busy with a home renovation that has gone on too long and we are nearing the end and its coming along great but it has been eating up a lot of my time lately. on top of that, the markets have been strong, and i've been letting the charts "breathe" so to say in an attempt to gain some insight about what comes next. that being said, the markets and the charts have been showing strength, and not much out there impresses me in terms of shorting. i am not fighting the the trend, or lack of it, and have been focusing then on the house and my day job. this next week will be interesting. i have two charts of the SPX for us to look at.

this first chart is a longer term view of the SPX and a major trend line highlighted in blue. we've fallen below it for a second time now. retracing to this line and busting above with volume indicates strength and would suggest perhaps more upside for some time to come. a retrace on low volume with no busting through or a busting through accompanied by a subsequent breakdown may be an additional red flag signaling the making of a top for some longer duration beyond the short term. the red circle highlights our approach up the underside of the blue uptrend line.

below is a shorter term view of the SPX. the last candle pictured is the thursday before the easter holiday - the low volume makes sense. monday and the reaction to friday's strong job numbers will start the week out with a bang. the strong job numbers suggest economic strength - i am no economist, but i imagine that low unemployment is bullish for a consumer-driven economy; however, strong numbers won't inspire the fed to cut rates. tight labor markets aren't necessarily good for company profits. anyway, back to the charts. check'em out and let me know if you have any thoughts.