Monday, March 30, 2009

S & P 500 Correction or Rejection?

S & P 500 Chart, Daily Bar, March 30

S & P 500, Chart 3302
What to watch:
  • Half way back price is 833. This is an important technical retracement point.
  • The green line (the midpoint) is 756 and rising. Tomorrow it should be around the 764 area. The market should find good support at the line.
  • The first major support area is 740-752. From previous up and down moves.
  • The small gap from the opening is troublesome, and needs to be closed.
The S & P 500 is at a major turning point. I wrote earlier about the importance of establishing support below the market. This test of support is happening now. If the uptrend is good, this support will hold and the market will return to the upside resistance in the 825 area. If the market falls below 740 a test of the lows would be indicated.

It is always easier to be bullish once the market starts to establish support. This lets you know that there are willing buyers on in waiting.

I still favor the upside. But, it really is a coin toss right now.

Subscribe to All American Investor via Email

Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

Follow All American Investor on Twitter

More from All American Investor