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Good News for Market Bulls From S&P Indicator


The S&P 500's RSI may be indicating that the market will head higher.

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It sure feels like the market has been in a corrective process, and perhaps you could say this if looking at emerging markets. However, when I see the S&P 500 (INDEXSP:.INX), I see bullish setups staying intact. From a technical analysis perspective, I see the market holding the breakout level even with tests. I see the market creating a sideways movement above that breakout and possibly wedging to go higher. Now, technical analysis isn't a perfect science, so insert your favorite disclaimer here.

Other clues are also giving me reasons to remain bullish. Look at the Relative Strength Index (RSI) of the S&P 500. It fell to 50, essentially wiping out all the overbought conditions, then the S&P tested it again. This is good for the bulls. Additionally, the NYMO (the NYSE McClellan Oscillator) gave a nice, healthy negative reading and has continued to churn in negative land, but it had a higher low yesterday. These things in combination have told me to stay long here and keep with the uptrend. I'm still bullish until my 1916 target gets filled, then I'll look over breadth, rotation, and trend quality.
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