There is no reason to consider bearish or downside scenarios in the stock indices unless…

The S&P 500 index has broken above 1963, which is a bullish near-term development and targets additional upside toward next higher targets / resistance levels at 1990 and 2044.

With the move above 1963, the zone at 1937 – 1963 now becomes support on any pullback.  There is no reason to consider downside or bearish scenarios unless the index falls back below this zone or unless the index makes considerable upside progress and reaches higher resistance at 1990 or 2044 – 2092.

The Nasdaq-100 has moved over 4301, which is a bullish development and open the door for additional upside toward higher resistance at 4480 – 4540.  The NDX is leading the indices higher and this also supports the idea of higher prices ahead for stocks in general.  There is no reason to consider downside or bearish scenarios in this index unless critical support at 4078 is breached.

The Russell 2000 has moved over 1040, which negates the bearish bias for this index and opens the door for additional upside targeting 1078 and/or 1140 – 1165.  Critical support in the RUT is at 999.

With the move by the RUT above 1040, the SPX over 1963, and the NDX over 4301, all three indices are in synch to the upside and this is supportive of across the board gains as they move higher toward next zones of resistance.

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If you’d like to learn more about how to read the stock market using volume at price information, click here.