The Rally Hits a Wall

The European euphoria of Friday has had a head-on collision with reality. We did get the rally we were looking for last Thursday, but it was so rapid and extended that the resistance area we were watching, just above 1358 on the S&P 500, was reached in almost no time. That has led to a screeching halt at that level. It is a difficult resistance level that needs to be decisively penetrated. But the possibility is extremely doubtful at this time.

I am referring particularly to the fact that the oversold condition in the short-term Arms Index readings that generated the move was based upon a couple of very bearish days, and those numbers are now being offset. The five-day is already back to overbought territory, and it will not take long for the same thing to occur in the 10-day. Also, note the very narrow trading range yesterday, giving another sign of difficult overhead supply....285 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.