SPX Technical Analysis

SPX Breaks above resistance S1

S1 is the resistance formed by the "W" bottom formation. Now that it has been overcome S1 should become support for the SPX.

Per the last report we said we'd sell our accounts not managed by mechanical methods to 100% cash upon a close over 1420-1425. Even though we believe that a significant bottom is in place and the SPX will eventually trade much higher, we're going to go ahead and move to cash in the hopes of buying back in upon a retest of S1 around 1410.

Markets do not move straight up. After a 4.8% move off the bottom in just six days, the market is due to reduce its rate of increase and will probably bounce off S1 at least once before it continues its move upward.

We fully realize that this move is a gamble and that we could be left behind if the move continues upward uninterrupted, but we like pocketing winning trades and this one will put us far ahead of the market for 2007.

Last Report