Futures are way up this morning portending a big opening on the markets for the month of August. Will this be enough to push the S&P over 1000?
I've been having a lot of problems posting lately - for some reason this program has become almost incompatible with my mouse, jumping all over the place and eating my blog entries (I lost 3 over the weekend and gave up - oh well...) And for some reason, the site that I usually go to for my intra-day charts (www.barchart.com - awesome site!) is saying that it can't find any stock named S&P500 and can't draw the intraday chart (it can do the daily and weekly nicely though). So while the stars seem to be aligned against me, hopefully they will be on the side of the markets. I'll take one or two for the team... 
So here's a daily chart instead:
S&P 500 - Daily Chart - 29 Days
First off, I want to point out something very important - look at volume rising for the past 6 days. No rally goes anywhere without increasing volume. The big boys need to have conviction that the movement is for real, and buy in. And this is finally happening. If today turns out to be a big up day, keep an eye on the volume - hopefully it should be up over Friday.
Next go up and look at prices - Thursday's and Friday's price action formed a small mini-triangle going into today's breakout. Note - Friday was more or less a Doji day - price opened and closed in the same area and more or less formed a cross candlestick. Doji means "indecision" in Japanese - it's a signal that the prevailing trend has paused or is about to reverse - but it doesn't automatically mean that it is a reversal - just a pause. As with many Japanese Candlesticks it's important to see the next day's price action for confirmation or clarity.
I also drew on the chart a short horizontal line showing the 982 resistance that stopped the market on Monday. It was tested as support on Friday - very bullish. If the S&P does bounce back off of the 1000 level, look to that area as a line in sand - if the bulls are still in charge after hitting 1000, it should be a support if reached. If the bulls are traumatized from a failed try at 1000, and have given up momentum to the bears, then 980-82 not holding on a pullback would be an important clue that this has run out of gas.
The only bothersome thing is the MACD-H - signalling a divergence (price is going higher, MACD-H is going lower). If today turns out to be a big up day, then I would expect the MACD-H to start reversing and going back up. If for some reason today starts strong and peters out and doesn't reverse the MACD-H, then I would expect that the divergence will eventually win out and this rally won't be sustained.
Better quit while the quitting is good - before this thing crashes or before I jinx things. At this point FAS futures are up over 6% - could be a good day.
Good luck!