Jack Steiman, www.SwingTradeOnline.com, on S&P 500 Levels to Watch
Oil collapsed Monday after breaking out last week. The transports collapsed after breaking out last week. You get the point here. Gold shot up as did the Vix in a big way, although it's still a dollar below taking out that 40 resistance level. If it closes over 40 it was simply a head fake breakdown. Not what you want to see when a market is supposedly trying to set a healthy right shoulder. Too many occurrences against what normally should be taking place. Breakouts aren't supposed to last one day and then collapse out. It seems to me there's an excellent chance that this bear market rally has seen its best days.
The most important aspect to holding a rally is leadership from each sector of importance. IBM (IBM) has been a huge leader in the technology space but warned on revenues and is down some after hours. Bad to lose that stock, but Texas Instruments (TXN) did come out with a big report, and that's helping to lessen the shock for the futures which are up some.
The S&P 500 closed above some strong support Monday, but did lose its trendline number at 845.
Just below we have the 20 day simple and exponential moving averages at 827/828 respectively.
Add in the massive gap at 830, and that 827/828/830 area is just huge support that needs to hold on any further selling. Only the 50 day moving averages below would be left if those all went, but you'd hate to lose both 20's and the gap when they're so close together in price and acting as major support. 815 and then 791 are the 50 day exponential and simple moving averages. If we start seeing those levels it's not good even if we hold initially. 827 needs to hold all further selling or the odds of this rally being over will have risen quite a bit. Not etched in stone but clearly a major blow to the bullish case. Very slow and easy her folks. I wouldn't short unless we moved up on bad internals or if we lose the 827 area and come back to retest and that retest fails.
Mike Paulenoff, www.MPTrader.com, on the Outlook for Gold
Our model portfolio has been and still is long the Market Vectors Gold Mining ETF (NYSE: GDX). We hold that rather than the SPDR Gold Shares (NYSE: GLD) largely because after the March low in equities my work argued that the equity component of the gold complex had a "safer" and more bullish pattern than the gold pattern. Of course, when "it" hits the fan, gold will be the place to be - in no uncertain terms - but the GDX will not be far behind (in my opinion).
That said, the daily pattern of the GLD - as displayed on the chart in the link below -- shows that during April prices hit a double low just below 85.00, which also happens to be just above the "sideways" 200 DMA (now at 24.60), all of which is technically significant, if not near-term bullish.
However, let's notice that the GLD must climb, hurdle and sustain above 88.60 first and, more importantly, above 90.50 to trigger very significant buy signals - that will argue for a run at the Feb high at 98.99.
For now, though, as long as support at 84.90/60 contains any forthcoming weakness, let's consider the GLD to be ending its decline from 98.99, and preparing for upside acceleration in the upcoming days.
Harry Boxer, www.TheTechTrader.com, on the Direxion Financial Bear 3x Shares ETF (FAZ)
The Direxion Financial Bear 3x Shares ETF (FAZ) is obviously one of our favorites, and we trade it on our Web site constantly. Monday showed what I think is significant action technically, a big breakaway gap on heavy volume that was followed by a strong move all day. The stock moved up towards the 10.40 area, went sideways in a flag-type pattern, surged again towards 10.60, flagged once again, and then had another move that took it up towards the 11 area. Over the course of the last 3 hours the stock came down, moved back up to test the high, and then backed and filled, broke out to new session highs over 11.25-.30, had a quick hit for about 3-4 minutes, recovered sharply, and then broke to the upside and had a terrific close.
FAZ closed right near the April 15 highs, so there's resistance in that zone. If it should get through that, there's the intermediate declining tops line in the 12 3/4 area, and then lateral price resistance up around 14-14 1/4. So I expect to see potentially both of those tests over the next day or two. There's a big area of congestion in here that was broken on a big gap down on April 9. If it should get above the 14-14 1/4 area, it quickly can move up to 16 and then maybe even as high as the 18 area. On the 15-minute chart, there's initial support around the 10.90 area and secondary support in the 10.60-75 zone. With a strong close on Monday, I would not be surprised to see it gap up tomorrow and continue trending forward.
See Harry's video chart analysis on FAZ.
(http://www.thetechtrader.com/info/charts/index.php?id=342)
Gary Dean, www.MarketsPath.com, on the Ultra Index ETFs
The break of the bearish rising wedge finally has come to start a downwave that can take us down much further than many are anticipating. That said, the 5- and 15-minute charts are showing some buy signals, so locking in profits and exiting the short side in the coming days is not a bad idea if trading the positions. I can see the SPX bouncing back to test the 848 level in the coming days, which is our target area to re-enter the short side. From there, this intermediate wave (2) down should last 1-4 weeks with a final target for the SPX in the 770-720 area when completed.
