Two significant events today for the S&P 500, SPX:
1) SPX closed today at a 2010 high of 1159.46, exceeding the 2010 YTD closing highs of 1150.51 yesterday, 1150.24 on Thursday, and 1150.23 on January 19. This time, however, these previous highs acted as support, instead of recent resistance, intraday and at closing.
2) The 25 day simple moving average crossed above the 50 day simple moving average, an intermediate-term signal that a bull market now exists.
If this support holds, which I believe it utlimately will, this can be considered an upside breakout. As with the inverse testing of the 1150 area as resistance, the support may be tested several times over the next days.
As stated before, I believe there will be an upside breakout, especially now that recent resistance is solidifying into technical support. In addition The Russell 2000 regained and exceed it's 2010 high first, followed by the NASDAQ Composite and then the NASDAQ 100. Now S&P 500 has followed accordingly. The Dow Jones Industrial Average is lagging slightly behind the SPX. This has been a familiar pattern during this rally from the March 9, 2009 low.
The Dow Jones Industrial Average, DJIA, 2010 high YTD is 10,725.43 on January 19. The DJIA closed today, Tuesday March 16, at 10,685.98, less than 40 points below. The DJIA surged in the last couple of hours of trading, seemingly following the upwards draft of the SPX strength into the close as the US Dollar weakened. I expect the DJIA to now follow suit with the other major inidexes and break through recent resistance to new 2010 YTD closing highs.
I reviewed in detail the S&P 500, SPX, and US Dollar Index, USD, over the weekend, for more detailed commentary of the SPX and USD charts. The USD was down -0.54 or -0.67% today to 79.70, the lowest close since February 16. The SPX was up +8.95 or +0.78%. The SPX is now in an intermediate-term bull market, as is the US Dollar. Both the SPX and US Dollar are in long-term bull markets.
Below is the daily chart for the S&P 500 (SPX). Commentary is above and in more detail in the weekend post and tomorrow. The highest yellow line on the chart below is today's close of 1159.46. The second highest yellow horizontal line is the previous 2010 YYD closing high, yesterday, of 1150.51, which is acting as support., The third highest yellow horizontal is the 12-31-09 year end close of 1115.10. The lowest yellow horizontal line is the 10 month exponential moving average of 1069.78, which is a long-term bull/bear market signal.
Below is the daily chart for the US Dollar Index (USD). Commentary is above and in more detail in the weekend post. The highest yellow line on the chart below is the 2010 YTD closing high of 80.93 on February 23. The second highest yellow horizontal is the benchmark price of 80.00. The third highest yellow horizontal line is today's close, Tuesday March 16, of 79.70. The lowest yellow horizontal line is the 10 month exponential moving average of 79.11, which is a long-term bull/bear market signal.
Two notable items stand out on this chart:
1) The USD is riding the yellow downtrend line and has not been able to close above. This is downtrend line is from the March 9, 2009 high of 89.57 down through the February 23, 2010 YTD closing high of 80.93. USD has been struggling with this trendline since February 23 and has not been able to stay above. The USD is literally riding the underside of this downtrend line!
2) The USD has broken down though the yellow uptrend line, for the first time since January 15 intraday. This uptrend line is from the November 25. 2009 closing low of 74.24 up through the January 14, 2010 closing low of 76.76. The November 25 low has been the bottom, since the March 9, 2009 peak.
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