For the first time in a long time, stock market bulls have seized control here, but they face a number of major tests just ahead.
Perhaps the most important is 12,743 on the Dow (first chart below). The Transports (second chart) cleared their February high today, so a Dow close above the same level is all that’s needed to reverse November’s Dow Theory sell signal. 12,300-12,400 should be strong support on the Dow.
The S&P (third chart) needs to clear 1370-1380 and 1400-1406. 1344, 1333 and 1320-1325 are support.
The Nasdaq (fourth chart) has also had a nice little breakout here, with 2387-2419 the next test. Support should now be 2280-2300.
After months of bearish sentiment, the bulls may finally be on to something, but they still face a couple of tests, most notably on the Dow and S&P.
Paul Shread is a Chartered Market Technician (CMT) and member of the Market Technicians Association.
