Right now the SP500 price oscillator is pointing upward and that is a very significant statement by the bulls. The direction of the price oscillator shows the tug of war between bulls and bears. This week the price oscillator briefly pointed downward on Monday after being up since the first week of June. The bulls flipped the direction upward on Tuesday and that has held the entire week. Changes in directions in the price oscillator that are quickly flipped again can result in fast price movement in the original direction. For example, a price oscillator pointing downward then pointing upward temporarily can result in huge price crashes (recently happened in May). This is because the bulls in this example exerted massive amounts of energy trying to change the direction of the price oscillator (was pointing down originally) and once they are able to change the direction, the next issue is whether the new direction can be sustained. The bears in May once again easily flipped the price oscillator downward a few days later. Once this was done, the bulls were exhausted, nowhere to be found, resulting in the crash we saw in May.
Right now the bulls have had momentum since early June; the bears tried taking it away on Monday and again today. However, they are becoming more exhausted after each failed attempt, and once they are done it will become easier for the bulls to have their way. Tomorrow and the next week will tell whether today was the bears' last effort. (This is called a fish hook, taught to me by Tom MCclellan, although an official fish hook as yet to be confirmed).
If prices had closed below 1322 (the value that was needed to turn the price oscillator downward) then there would have been a good chance that we would have tested June's lows and things would have gotten ugly, as that would display exhaustion by the bulls. As for now, the bulls are in control despite macro-economic conditions,. The US Market has two things going for it: Election Year (June is a good month in the Democratic Presidential Cycle) and the Fed.
On a side note the McClellan Oscillator continues to build a complex bullish structure near the overbought level; this is indicating we are going to go higher than the highs seen so far in June. I will talk more in depth about this in the weekend.
P.S. Looking at my account today, its not a good time to be long either.
Monday Night Update: Looks like the futures are roaring. Here is a bit of a bold statement I made on Sunday (based on a few indicators I am using): Highly Likely S&P 500 Will Hit 1400