Today's move higher could be very significant, as we broke out of the recent trading range between 1,100 and 1,040. Additionally, the S&P 500 Index moved above its 200-day moving average -- a longer-term trendline that many use to distinguish between a bull and bear market.
The ball is in the bulls' hand now, momentum is upward, it is a good chance to check the health of the overall market by observing this bull run. If the upward momentum is strong enough, next resistance will be 50 days moving average 1143 and resistance 1150. However, keep an eye on these two resistance because there is a big bearish head and shoulder formation going on, and these two resistance may be the right shoulder if the market sell off after hitting them and go down to 1040 or lower.
In my opinion, the top we saw on April at 1220 should be the top of this bear market counter rally. I will not add any long position to my portfolio unless there is a sell panic capitulation. However, I will add up short position when the index run to some critical resistance level in the near future. I will keep you alert when the day come.
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