Spyders Crawl Back From Abyss, Says Dr. Joe Duarte
Duarte added: The key support area that held was the S&P 500 750 area, and the 20-day moving average around 761. Since both support levels held, despite the selling and the doom and gloom on Friday, the market was set up for a rally. And a huge rally we got, nearly 500 points on the Dow Jones Industrial average.
And after some backing and filling, after the huge move up, you can see the potential for higher prices, barring a major break in the market due to some kind of external or internal shock. For one thing, the bottom was made in early March, and the market had rallied all the way back to a key intermediate term resistance level, where the 50-day moving average and a down trendline that goes back to September are clustered. Both resistance levels got taken out on Monday, meaning that for now the bulls have the upper hand.
What it also means is that now that prices have risen above that key chart region, we can expect a move toward the next resistance area, 850-876, some 7-10% above the current trading region, a nice enough rally.
Duarte's conclusion: The trend is up for now, although the potential for volatility is still intact.
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Duarte's IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.
He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela's political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.
One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
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