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Went to the edge today and is seeing a bounce
The S&P index went to the edge and quite frankly fell a few feet below that edge only to find a helping hand and has recovered. The edge was the 200 week MA at 2348.38. The low reached 2346.58 and bounced. We currently trade at around 2400. The move higher has taken the price back above the 50% retracement at 2376.60.
Drilling to the hourly chart, the bias remains negative. The price is well below the 50 hour MA at 2508 (and moving lower). If the price is to recover, getting back and staying above that MA is the minimum for traders to feel a little better. The 38.2% of the move down in December comes in at 2519.86. The 100 hour MA comes in at 2585.88 (and moving lower). Back on December 13, the 50 and 100 hour MAs were converged. The price tested those MAs and promptly sold off. Going forward, buyers need to prove they can take the price above those MA.
It is good to take back the 50% and fall a little over the 200 week MA and recover, but there is work to be done to give the dip buyers against those levels more confidence.
This article was originally published by Forexlive.com. Read the original article here.