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 S&P 500 Has Its Sights Set On The Bull Market Highs By Corey Williams, Editor From Options Trading Research This week we're taking a look at the recent price action of the S&P 500. On April 2nd, the S&P 500 touched a bull market high of 1,422. But things quickly took a turn for the worse. Over the next few trading days, the S&P 500 quickly fell more than 4.5% to 1,357. And then it spent the next few weeks consolidating near the lows. -------------Sponsor------------- If You Have Just $50... You may be able to turn it into windfall profits. Imagine making a string of tiny investments and watching it grow into extraordinary wealth. After today, you may not have to imagine any longer. Click here for details... ------------------------------------ But over the last week, the large cap index has turned much more bullish. In fact, the S&P snapped out of its consolidation. It raced from 1,366 to over 1,400 in a matter of days. And it broke through multiple resistance levels along the way. Now the large cap index has a clear path to make a run at the April highs. Let's take a closer look…  The red and blue lines on the chart above held the key to the markets next move. The blue support line marked the recent lows. And the red resistance line marked the March lows and the high of the April trading range. If the blue failed to hold, the S&P would likely head down to test 1,340. But if it broke above the red line, then it would set the stage for a rally back to April highs. As you can see, the recent rally started on a test of the recent lows near 1,366 (blue line). But buyers stepped in to send the market soaring. Then the S&P cut through the main source of resistance at around 1,390 (red line) like a hot knife through butter. No doubt about it, breaking through the red resistance line is very bullish. What's more, the bullish breakout is being confirmed by another indicator… the number of stocks making 52-week highs. At the end of last week, we saw a large number of stocks making new 52-week highs. That means lots of stocks are helping to fuel the recent rally. Needless to say, multiple indicators signaling a bullish breakout is exactly the kind of thing bullish investors want to see. Here's the best part… this is a great trade setup. Remember, one the basic rules of technical analysis... once a resistance level has been broken, it becomes a new support zone. In other words, now that 1,390 on the S&P is no longer resistance, it's a support zone. That makes 1,390 a good entry point for a bullish trade on the large cap index. Keep an eye on this key support zone this week. If we get a pullback, take a look at buying call options on the SPDR S&P 500 (SPY). Good Investing, Corey Williams | Wednesday, May 2, 2012  • 3D Systems (DDD) rose to a 52-week high of $31.56. Their market cap is $1.6 billion. • Jaguar Mining (JAG) dropped to a 52-week low of $2.61. They have a market cap of just under $223 million. • VISA (V) reached a 52-week high of $125.35. The company's market cap is over $81.7 billion.  "Spend at least as much time researching a stock as you would choosing a refrigerator." -Peter Lynch   
 Time To Pounce On These Biotech Takeover Targets? Monday, April 30, 2012 Oil Stocks Are Ready To Rebound Friday, April 27, 2012 Stock Options To The Rescue! Qualcomm (QCOM) Wednesday, April 25, 2012    |
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