Halftime: 4 Signals That Will Either Confirm Or Deny Rally

Investors found themselves in a state of limbo Tuesday as they grappled with more weak economic data versus more strong earnings reports.

On the bullish side, DuPont [DD 40.38 1.39 (+3.57%) ] wowed the Street with a quarterly profit that nearly tripled due to strong sales in all of its businesses.

And on the bearish side, weaker than expected consumer confidence renewed jitters that the second half could be problematic.

How can you trust the rally is real? What should you be watching now?

S&P 500 INDEX (.SPX) 1113.84 -1.17 (-0.1%%) INDEX

You’ve heard a lot of talk about the 200-day in the S&P which is 1113, but I’m now focused on the 100-day in the S&P which is 1128, reveals Joe Terranova. We haven’t elevated above that level since May 13^th. I’m looking for the market trade above that range to confirm the rally. My bias is that the second half of the year will be favorable for equities.

I'm also watching gold and Treasuries as a market tell, Terranova adds. That's because I believe we need to see money rotate out of safe havens and into equities. As a result I’m watching for gold [GCC1 1158.0 --- UNCH (0) ] to break below 1144 and the yield in Treasuries [US10YT=XX 3.03 0.01 (+0.33%) ] to break above 3.13.

I’m watching 23.38, the 200-day in the Vix [VIX 23.19 0.46 (+2.02%) ], says Jon Najarian. Last time we hit that level we bounced higher but this time we pushed through it. If the Vix doesn’t break back to the upside I'd take it as a signal that we can sustain the rally.

The market has been jubilant but now I’m seeing fatigue, counters Patty Edwards. I don’t like the technicals yet. I'm cautious and staying on the sidelines. However, if we break above the 100-day that Joe talked about - then I’ll feel better.