Tuesday, June 2, 2009

Testy Tuesday

Tuesday the SPX tested and closed above the 200 day ema for the first time since May 2008. Pretty impressive action and tide the keeps rising higher. So how long will it last? I think we could see either one of two scenarios in the coming weeks. One, the SPX blows right thru the 200 day and charges up to 989 or thereabout. Or two, the market retraces off this 200 day ema and comes back to the 910 area where the 20 day ema roughly would be and then we rally after bouncing from that support. Either way I remain bullish and think we should get to the 980s at a minimum this month. But after 4 straight green days a pullback might be healthy.

For Wednesday I would be watching that intraday pivot on the ES futures at 942.75 and if price fails to stay above that then I would expect a bit of a pullback or consolidation. Above that and the market is free to run imo. If oil and energy start to fade that could dampen any extended rally as that sector has been a hgue part of the recent run up. Trade safe.

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