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Feb 24th, 2010: SP-500 Positioned For a Break-Out?

Posted by pugsma on February 24, 2010

4:40 pm EST:  Life is good for the bulls.   SP-500 held key support at the 13-day (1095.57) and 34-day (1098.50) EMA, printed an impressive reversal candle on the daily chart, and closed over the 1105 level.  The 50-day SMA (1108.91) is within a simple gap up open tomorrow.  Thus, a short covering rally for wave iii-(5)-1-[5]-P1 has a potential to close out the month of Feb in a very bullish fashion.  The two most likely primary counts (white and turquoise) are battling it out to see who gets to a new high over 1150 first. 

And did you see that VIX take a dive today?  Down -5.2% to the 20.27 and almost a teenager again.

Oh yeah, Uncle Ben signaled today that the Fed is going to keep interest rates “exceptionally low for a long time period to come”.  Banks are rallying, with XLF up another 1.5% today.   Easy money for the banks, means easy money for the stock market bulls.  Low volume climbing the “wall of worry” to 1250 by the mid-term elections in November 2010.

15-min Chart (EOD):

60-min Chart (EOD):

11:45am EST:   With the 13-day EMA at 1095 holding as support this morning, the SP-500 is sporting a solid reversal candle.   A break-out could be ahead if the 50-day SMA and key resistance at 1109/10 is busted through later today or tomorrow.  If the SP-500 finishes today in the 1105 area, they will likely gap it up and over the 1109/10 resistance tomorrow.  On the downside, it’s about holding above 1095 today.

SP-500 Daily Candles (mid-day):

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