Consolidation Day - Bad news and market holds

Consolidation Day, the markets are littered with bad news, but price holds in this supported range.

After this past week's abysmal news on the economy(unemployment numbers), corporate greed(Libor is fixed), and the monopoly game in Europe(Merkel has staying power), the S&P500 is stalling into the new week with a consolidation day. Consolidation is when the market is waiting for a leader to set direction or news to create direction. First, let's consider where the market has traveled. Day traders moved this market from 1300 to a high of 1375 the last week of June and high side consolidation through the Fourth of July week. Which as mentioned in previous post is a good time for a rally. A retracement of close to 40 points is normal. 1342 to 1349 has been an area of support and price has consolidated at these levels for the past three sessions. 1348.25 is the Point of control in this market and if Sellers can keep the close below this level we might see a test down to 1333 before the move up. Again, the S&P500 could be unhooking from the Euro. Normally there is a positive correlation with the moves of the Euro to the US Dollar and the S&P500. Or another way to look at it is as the Dollar index gains strength, the US indexes will go down. An inverse relationship. Earnings could set this divergence off, and as Earnings come in we could see the correlation drop between Euro and the S&P if Strong US companies with earnings generated in mostly US sales. We shall see. The closing will show a reversal on today's price action with a negative reaction pr [...]

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