Monday, January 24, 2011

Some hope for bulls, morning update

Bulls are starting well the week, SPX up 6 points as I am writing this. Price moved above both EMAs that are slightly rising now. There are two resistance levels, one at 1286 that was overcome this morning and another one around 1289, the two month uptrend line.

The most important thing is if SPX manages to make a higher high on daily chart, a close above 1296. That will give bulls hope that the leg on the upside is not done yet. Any decent move down from a level bellow 1296 is going to work on bears favor.

It is important how the market closes today and for the rest of the week. It is possible to see the same pattern we saw at previous temporary tops, June 2009, January 2010, April 2010, August 2010, small moves up and down from one day to the other (see previous post).

I'll keep an eye on EMAs crossing and SMA 120, neither of them being close to a "sell' signal at this moment.

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