The S&P 500 looks to recover

The S&P 500 is the one to watch as of late, as earnings season comes about and the markets become very bullish. Markets were led in part strongly by Apple today, which saw a boost to its earnings and its forecast over the Christmas season, as it seeks to boost revenues and margins via its new phones which we have all seen and heard about.

I don’t normally talk about companies at all, but apple takes up 3.3% of the weighting of the S&P 500, and so any positive move for them will impact the confidence of investors who are holed up in equity indexes in the US market.

Looking at the S&P 500 on the charts, it’s clear to see that the bulls have taken control of movements higher, after the recent touches on the long term trend line from the 2011 dip. For a while, the market was quite bearish on the touch, but has since rallied back quite strongly.

Resistance levels are looking strong, but the S&P 500 ignored a strong level as it rallied higher. However, it’s worth paying attention to them at present and they can be found at 1923.78, 1951.42 and 1976.23.

Another key area which traders should take notice of is the 200 day moving average. I know a lot of people ignore moving averages when trading, but they shouldn’t as they provide a lot of information, and markets from time to time will play of them quite happily.

As we can see the market has rushed up in aftermarket hours and touched the moving average and is now using it temporarily as resistance. A solid breakthrough here would be bullish up until 1923, however, we will likely have to see momentum through the moving average and a confirmation of further bullish trending.

Overall, the S&P 500 is looking solid, after the recent market correction. But the US economy is still ticking along and low oil prices will likely lead to a boost for company's future earnings prospects as well. Perhaps the bulls are still alive and well in the market, and they’re now here to catch the falling knife and put things right.