We clearly closed above the down trend line this time. We also have a green price bar again and the volume was higher on the up bar then it was on the down bar. This looks pretty good to start a bounce. Lets take a peek at the SPX daily chart.
We have turned the short term trend to neutral. That is a nice looking reversal candle and with an increase in volume. The first confirmation is to take out yesterday's high. That should cause some short covering. The next important level is 1340. You can see that it was support in Feb. and early March. Since it was broken it could become resistance now. I am not sure that would be significant enough to stop a rally though from this oversold a condition. The 100 SMA at 1355 and the red line at 1357 are likely to be much more important. There is a lot of overhead resistance above that 1357 level. I don't see how we conquer that on the first try. I view this as a swing trade type bottom. A sustained rally seems unlikely given the technical damage at this point. There would have to be some repair work done first.
Bob
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