More storm clouds today with markets selling off  below key technical levels in response to credit worries overseas and nervousness about the strength of the recovery generated by mixed economic reports.

Today’s reports saw Durable Goods declining overall but rising ex-transportation and weekly jobless claims improving more than expected.

Rail traffic, a leading indicator of economic growth continued to rise and reached the best levels since 2008 and after hours Oracle and Research in Motion posted earnings gains of better than +20% each after the market closed. 

Retail sales disappointed and credit concerns in Europe flared with Greed Credit Default Swaps moving back to near record levels.

On the technical front, many key support levels that most people watch have been taken out this week with four down days in a row.

However, most of our indicators remain on “buy” signals, contrary to general market analysis, although have obviously weakened this week.  However as odd as it seems we remain on buy signals, our macro indicators still point to higher prices ahead and underlying weekly momentum is actually positive.

In the chart above with all the “noise” taken out, we can see that our macro chart, the S&P 500, also played with the SPDR S&P 500 ETF (NYSE:SPY) remains on a “buy” signal and in a long term uptrend.  A break below 1050 would change that picture which is just over 2% from here.

Sentiment remains extremely bearish which is bullish. Friday brings us the 1Q GDP revision and Michigan Consumer Sentiment Report.

Written By John Nyaradi Publisher of Wall Street Sector Selector

John Nyaradi is Publisher of Wall Street Sector Selector and Senior Vice President of Private Client Services for ProfitScore Capital Management, Inc.

The best way to play the S&P 500 is through ETFs and we have included some details on the SPDR S&P 500 ETF (NYSE:SPY) as a long play on the market below:      

SPDR S&P 500 ETF (NYSE:SPY)  Visit Our SPY Category: HERE      

The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index (Ticker: SPTR). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.  

SPY