by
on April 13, 2012

It is not only very important that we hold above the 1340 recent lows area (since we don’t want to put in a lower low) but we also don’t want to dig too far into old 2011 highs which is also the 1340 level. This old highs level needs to act as a support area for us to build a base above. If this happens we will be able to digest the recent big move higher in a productive way and it will give us a solid foundation to trade against.
We are happy to see a continuation of Wednesdays move into today’s session making this rally attempt more convincing. When a major index like the S&P 500 breaks major support like the 50 day moving average, it is critical that buyers step in and retake that support level within the next 1-4 days. Once a major support level is breached and old support turns into resistance, this spells trouble for the market as a whole and that the uptrend is disintegrating. This time the bulls let it slip below that critical level but retook it on day 2. This is great news but of course it all depends on how we close. So far so good though.

Weekly Chart

Not only did we take back the 50 day moving average level but we were able to also break above the February highs which could have acted like minor resistance.

We would now need to stick the closes here for a couple days and be mindful of the other support that was breached and will always act as some resistance going back up.

In particular the 21 day moving average mark (1399) and the trend line (1403) going back to the October 2011 lows.

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Better Stock Entries

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Disclaimer:

Global Chart Analysis, Specialist Trading and www.protraderstrategies.com (Company) is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. All products and information are for educational purposes only.The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Companys website, or in its publications, are made as of the date stated and are subject to change without notice.

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Companys products (collectively, the Information) are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Companys website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading and may not be impacted by brokerage and other slippage fees. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

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