Thursday  11 March 2010

 Yesterday, we presented a weekly chart showing the primary S & P trend, suggesting that it has room
to go much higher, S & P - New Highs Coming, Or At A Top?, [click on http://bit.ly/d7ssWg].  All that it
needs is confirming market activity.  Today, we will look at the daily chart to show how the market can
pause here, or even fail. 

 The odds of failing up here are smaller because of the established up trend, and it is up to sellers to
step in on increased volume to push the market lower on ease of movement to the downside.  Until
that happens, price will work higher, but mention of that possibility is made to be alert for that kind of
developing market activity.

 We noted, on the bottom of the chart, that volume increased yesterday, second bar from the end, [the
last bar on the chart is early morning, pre-opening activity.]  The range of yesterday's bar was relatively
smaller for the increase in volume.  This tells us that there were some sellers in the market that kept
price from going higher.  However, the upper end close also tells us that buyers remain in control.

 Another consideration is the fact that price has rallied uncorrected over the last nine trading days, and
buying after an uncorrected move, at a recognized resistance area, invites paying up to get long and
having to sit through a likely correction.  A correction may not come, but because this activity took place
at an area of resistance, the previous January highs from which price corrected lower, we can expect
some short-term selling against that resistance level.  Based on what was seen on the weekly chart
presented yesterday, and this daily chart, corrections can be bought in anticipation of higher prices.

 The 1200 area is certainly one of support, based on the channel and previous activity from January.
A new support level may develop above 1200.  Wherever support comes in, going long makes the most
sense.