Another good week for the bulls and its time to look forward at the week ahead. Looking at the charts, I see no reason to be short right now. This rally has to end sometime, and who knows it might end as soon as tomorrow, but as of today, looking at the S&P chart, I can't find any reason to be short here. That said, I am not blind to the fact that the economy is hardly recovering, the outlook remains bleak and the job situation shows no sign of improving but the bottom line is that as a short term trader you have to trade what you see, not what you think. If you are short due to the above factors, you might be (and probably will be) completely right in your long term assessments of the markets, but please remember that the markets can stay irrational longer than one can stay solvent. If you are a long term trader, and would like to short the markets, I would recommend scaling into your short positions, rather than taking the entire position all at once. Calling tops and bottoms is a fool's game. Let's have a look at the charts now.
1150 remains a tried and tested support on the S&P with May highs of 1174 being the next resistance level.
The weekly chart is more interesting in my opinion. The last rally stopped at the weekly MA(200), so keep an eye on that even this time. It's at 1198 right now and dropping fast.
I will be back later with some charts I like heading into next week and also the Chart of the Day.
Take care and good luck!