Earnings are clearly propping up the markets at this point.
Just a quick glance at the chart will show you that ES_F was heading downwards pretty aggressively until the first red line; the first big E.R. reports of the season. NKE and MU crushed their reports, and the markets responded upwards...but not on much volume.
The second red-line shows another save of SPY ... aided by beats by RHT and PAYX [the only companies that reported that day].
Rinse and repeat for a while...then the final line is at April 6th, when the first big bank earnings came out.
GS - Missed EPS [top-line] but big revenue [bottom-line] beat WFC - Beat top and botton C Beat top bigly [+.10 Wall Street Concensus], slight miss bottom line.
The markets were happy with that but then geopolitical tensions settled in towards the end of the day [threats against Russia...missile attacks on Syria] which caused the markets to pull back.
The upside resumed yesterday, once again on good earnings.
But the issue I see is illustrated by the purple price line. If you look at the OBV [on balance volume] at this price level vs the OBV when the S&P 500 Index was at this level before, we are way below where we used to be OBV wise. This divergence is bearish.
The money flow indicator shows that there has been some buying, but the size of the buying has dropped on each spike since the largest one. The Chaikin Oscillator follows a very similar pattern (as it should, confirming each other).
So I think we will indeed see some more upside in the near-term...but some large E.R. misses or another geopolitcal event could really pull us down viciously.
Or maybe we continue to float up slowly throughout the rest of E.R. If that happens, I'd want to see the OBV and the Chaikin Oscillator start to move up aggressively to at least where we were in early March. If that doesn't occur the markets may very well collapse at the end of the season (if not before that).
2700 will be break...target 2800!