However, the S&P has soared in the past weeks to 2009 all time highs as the market has been excited by good news and brushed bad news aside. Market sentiment now is that a bottom has been set and many are convinced (not without merit) that downside risk from here is known and measurable. So with optimism people have been coming in on dips in the market and these people will hold their positions through a downturn as their entry prices are low.
Let's take a look at the S&P500 with support lines:
The support lines at 875 have been very strong, and the 950 resistance proved to be minor in the recent rally. For my position, I would not get in at this point as I don't want to chase the market in a rally. I would look for a retest of the 950 level to see where it can go. I will look to get in if support is strong at that level.
I also post a chart of the S&P500 with Bollinger Band channels to show that even with the recent rally, we are within the volatility channels and there could still be upside from here.
I will look to post more commentaries in the coming week...
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