Despite the increased volatility and the fear that the tension in Ukraine brought to equity markets, S&P managed to close above 1840 support yesterday while ES futures today show an open of more than 20 points. Short-term view is bullish as trend remains up with the index continuing to make higher highs and higher lows.
S&P futures show that the index will open above the 61.8% Fibonacci retracement and will put recent highs to the test. This gap up may be faded but support at 1845-55 will probably hold and buyers will arise as fears regarding Ukraine have been diminished since president Putin has called back Russian troops from the borders back to their camps. From a technical point of view another new high is very possible but with RSI diverging I do not expect big buying strength to push the index much higher than 1870.
Concluding, bulls remain in control of this trend. All pull backs up to now have been met with buying and bears still seem not strong enough to reverse the short-term trend. 1840 on a daily closing basis is important support and if broken we should expect the index to move towards 1800-1815. The current sideways movement is good only for bulls and a great trap for bears. If the market continues its sideways move around 1870-1840 we believe that is consolidating before starting a new upward move towards 1950-2000. For more help trading this index become a member today.
As always, thank you for taking the time to catch up on my thinking.