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Thursday, April 19, 2012

SPX holding above 1370

SPX tested the key 1370 level again today, but bounced into the close.  Check out the daily chart below.

The price bars are still neutral.  Price was rejected at the 18 SMA and ended today slightly below the 50 SMA.  There was a considerable increase in volume today.  So far people have been selling into strength, but not in a panic yet.  If we break 1370, I would expect the sellers to get more aggressive.  Until that happens there is still a chance the market recovers.  Check out the 195 minute chart below.

The last few days price has formed an upward sloping trend channel.  The lower trend line was pretty close to the key 1370 level today.  Since we are still in the channel, SPX could easily bounce again.  Notice the difference in price behavior after this sell off as opposed to the early March sell off.  Clearly there are more sellers around this time.  We will see if the dip buyers have enough ammo to hold the bears off again or not.


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