With stocks soaring more than 15% since November, MoneyShow’s Tom Aspray examines the deteriorating technical picture and two interesting stocks set to report this week.

The stock market took quite a shot after Friday’s dismal jobs report as the already weak S&P futures quickly dropped another 11 points before they started to stabilize.

The market spent the rest of the day rebounding as the futures and the majority of key stock market averages closed well above the day’s lows. Overnight, the aggressive action by the BOJ helped push the yen sharply lower and the Nikkei 225 made new rally highs, gaining 2.8%.

The major European markets are also showing nice gains, and so are the S&P futures, as we enter the first full week of earnings season. The market’s yellow flag last week reflected the decline in the small-cap sector as well as the deterioration in the market internals.

With further signs of signs of weakness after last week’s lower close, will the earnings reports be enough to push stocks back to the upside?

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Chart Analysis: The daily chart of the NYSE Composite shows that it dropped down to the starc- band early Friday before rebounding to close barely above its uptrend, line a.

  • Last week’s close was just above the quarterly pivot at 8936.

  • There is first resistance at 9122, which was last week’s high with the starc+ band at 9209.

  • The NYSE A/D line did confirm the recent highs but dropped below its WMA on April 2 (point 1).

  • There is more important support at the February highs, line b, and the uptrend (line c).

  • The next major support is at 8700, which was the February low.

The Spyder Trust (SPY) made a new higher daily close last week at $156.82 (line 2) and then dropped as low as $153.77 early last Friday.

  • The decline held just above the important support from late February in the $153.50 area, line d.

  • The quarterly pivot as noted last week is at $152.75.

  • The longer-term uptrend, line e, is now at $151.

  • The NYSE new hi-new now indicator (see last week’s trading lesson Tracking the Market's Trend) has formed lower highs over the past few months, line f.

  • The short-term MA has dropped below the longer-term MA and is now testing important support at line g.

  • A convincing break of this support would confirm the negative divergence.

  • The number of new highs peaked at 440 in early January and then formed lower highs at 430 and 373.

  • At last week’s price high, only 268 NYSE stocks made new highs.

NEXT PAGE: 2 Stocks Reporting This Week

Tickers Mentioned: Tickers: SPY, AA, JPM