Bad Neighborhood

The S&P 500 is in a bad neighborhood and needs above 1701.71 to get out of it. Futures were full of good cheer earlier, but have now faded somewhat.

Price looks and feels heavy while it continues to feel buoyant at the same time. It feels almost as if there is a "news" bid below it, or an EOQ bid, or simply just a lot of bulls that remain bullish. A/Ds hung in well for the fifth down day in a row. Volume wasn't there, and even new highs did not evaporate.

The 50-day moving average is at roughly 1679, in the vicinity of the lower gap (1671.71). It's getting to the point where the market will need to make a move that wrong-foots a large group of traders, up or down.

Above, the 1710-1722 area still remains a target. Below, the 50dma should be support. And if it should not be, maybe the market will succeed in wrong-footing the majority.

Bloomberg reports that J.P. Morgan's "negotiations with federal and state authorities to resolve a series of investigations tied to mortgage bonds are focusing on a potential $11 billion figure, including $4 billion for consumer relief."

$11 billion to make something go away, most likely without admitting guilt or wrongdoing, is like saying, "We were guilty." Can't wait to hear the spin.

The root problem, once again, is fractional-reserve banking. And the world would be a much better place without it.