Two Key Levels Tell Us S&P Direction

Posted by Victor Adair -

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The stock market made a low early last week and then rallied on the idea that Market Psychology had “over-reacted” to Bernanke’s June 19 message. Stocks, Bonds and Crude Oil all had a similar trading pattern from Wednesday June 19 through Friday June 28. The S+P, which had fallen nearly 8% from the May 22 All Time Highs to the June 24 lows, bounced back ~3% by last Friday’s close. My trading theme has been that Market Psychology across asset classes registered a Major Key Turn Date on May 22…so, has the sell-off from the May 22 highs just been a correction in the bull market that started in March 2009…or is there more to go on the downside? Well, that depends on your time frame…and two key chart levels…see the Charts section below.