Editor's Note:

The market continues to show strength and managed to hit new highs for the year. However, the S&P 500 was unable to close above the 1100 level, which is currently overhead, round-number resistance. The small cap Russell 2000 and the Transportation index are both still under resistance and until these last two breakout they're facing bearish double tops.

Apple Inc.'s (AAPL) earnings tonight were very strong and TXN also delivered better than expected results. Both stocks were up strongly in after hours. This could carry over tomorrow morning and lift the market but I would remain cautious. Even if the S&P 500 closes over 1100 the 1120 level is the 50% retracement of the bear market decline and for many investors it's their target to lock in profits (a.k.a. sell).

My bias is bullish but I hesitate to add more bullish plays to a newsletter that is already overweight with bullish candidates.