SPY: Fed Stimulus Plus Good Earnings Equals Good Bullish Week

RSI- with the latest high this past week a bit lower than the last one, the RSI indicator continues to bleed weakness in the present bullish move up. But-at this point my observations strictly point to a weakening in the move but that is all. It would not be uncommon for the stock to rest a little before it continues to move up.

MACD- the MACD indicator come buying the trend and the momentum of the trend together to help us understand how fast the stock is moving. What we can observe presently is that the momentum of the upward trend continues to weaken but it still has a bullish flavor to it so I am hesitant to commit to saying the stock is getting ready to turn around.

Bollinger Bands®- the stock has touched the bottom band the last two dips, but is also using the 50 day moving average as support. The bottom band is just starting to move sideways which strictly means consolidation and I cannot go past that. I would like to see it drop through the bottom band and drop through the 50 day moving average before I give it any more bearish support.

Summary- the SPY still appears to be in a consolidating phase which could signify a period of rest before goes up or continued weakness and move down in the future. But present observations can't go past strictly sand there is weakness in the present bullish move.

Current Events

With signs of a slower economy mounting, the near-term outlook for U.S. stocks isn't rosy, but investors may find comfort next week from the world's major central banks.

The Federal Reserve will meet on Tuesday and Wednesday, with the report of weaker-than-expected, first-quarter growth could reinforce expectations the Fed will keep purchasing bonds at a pace of $85 billion a month.

As long as it looks like central banks are on your side and on investors' side as far as providing more liquidity, that's going to help improve sentiment.

A strong commitment from the Fed to continue its stimulative policy, coupled with corporate earnings that have mostly exceeded lowered forecasts, could help Wall Street extend a rally despite signs that the U.S. economic recovery is losing momentum.

A heavy slate of key economic indicators will be released next week, including personal income and spending, the Institute for Supply Management's manufacturing and services activity indexes, pending home sales, the Chicago purchasing managers' index and consumer confidence from the Conference Board.

The market has been rallying on the fact the ECB might actually start to do something; if the U.S. market reacts in the same way, that might get the market rallying.

Right now, markets are going through an adjustment process, trying to figure out just how robust the economy is here and overseas as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.