Stocks closed near their highs Thursday, rallying for a third-straight session, lifted by a string of upbeat economic reports and following several speeches from Federal Reserve policymakers suggesting the central bank has alot of time before it starts reducing its bond-buying programs.
With this news, the pressure has been taken off the market and the participants are now out of a panic phase. But is this really a time to calm down and think everything is ok?
Well lets take 3 things into consideration.
Looking at the S&P daily chart below you can see....
1) We are in a longer term downwards channel with lower highs and lower lows.
2) We bounced nicely off the 1560 area or - oversold valuations from the fed announcement.
3) We are now in an "area of significant resistance", and the market is about to decide where to go from here.
With that said, it is obvious the market is still not out of trouble. Not until we see higher lows and higher highs is the market able to get back on its feet, and that has not being playing out. So it is wise to be cautious here.
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| SPX daily chart |
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