Monday, March 23, 2009
Just What I Needed?
Monday the SPX got just what it needed. A powerful rally thru 800 resistance and a close at the highs around 820. This rally was quite impressive from my perspective as I was looking for a bit more of a pullback into the 740 support level but that did not happen and now looks like you got to be a buyer of dips. Of course the market did just rip up 500 pts so a few days of consolidation wouldn't surprise me.
The rally was broad based and tech and the banks led the way. The internals were strong again as I believe this was the 5th day in the past few weeks that the up volume hit 90%. That is simply telling you that when you look "under the hood" of the market, the internals are saying you that there is real buying and real strength being showcased. It doesn't really matter whether the bear is gone or not, the point is that we are in a strong rally and you should be bullish until the charts tell you to stop being bullish. Trading is really that simple, its when emotions become involved that we get into trouble.
For Tuesday, the pivot point is at 806.50 and it really is amazing to be back in the 8 handle. I think you gotta be bullish here above 800 but that doesn't mean chase strength. As always above the pivot and I am bullish intraday. I think we could get a pause day or even some profit taking. However, I do think this rally is real and has legs perhaps into May or beyond. Next few resistance areas to watch are 840 and 876 with obvious support down at 800 and 770.