Tuesday, April 1, 2008

Turning Bullish (Intermediate Term)

Everything depends on the direction of the breakout/breakdown of this consolidation range, but I'm leaning toward an eventual bullish resolution based on the following three ideas:

1) The JPM/Fed bailout of Bear has put a floor beneath financials
2) Support has proved to be solid at 1275 on the S&P
3) Bad News Good Action (Negativity is Overdone in the Near Term)

I'm a bit hesitant about hopping in head first to the S&P. Two days up in a row means that the upside is limited. Keep in mind resistance is still right above here at 1385-90ish. The action at that level will be very telling.

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