Coolhand's Market Analysis

Originally Posted by coolhand

Sooner or later it was almost certainly going to happen. The 200 dma got tested on the S&P 500 today.




Price closed largely on that key average at the end of the trading day. Price on the DWCPF closed just under its 200 dma. Momentum turned up. Volume was fairly robust. That's a plus for the bulls.



Looking at breadth, it soared. That's what we want to see as the 200 dma gets tested. There is conviction behind the move.

Still, victory has not been won until price can close above that key average and hold it for at least a couple of days. At the same time this test is occurring, price is hitting new highs. It's looking good for the bulls at this point. We won't get a fresh read from NAAIM for a couple of days. We'll need that to validate the strength we're seeing in the charts. If they get bulled up (we may need some upside follow-through), it'll be an easy bullish read for the following week. I've been wanting to lean bullish of late, but not with NAAIM being neutral themselves. Still, I've also cautioned that the bulls are in control despite the sideways movement the past month or so.

I remain neutral to modestly bullish for now. I'd be more bullish if price wasn't in the process of testing a key resistance area.